Oil eases on expected U.S. crude inventory build, stronger dollar

Reuters

Published Feb 21, 2018 01:25PM ET

Oil eases on expected U.S. crude inventory build, stronger dollar

By Stephanie Kelly

NEW YORK (Reuters) - Oil prices softened on Wednesday ahead of data expected to show rising crude inventories in the United States and as the dollar strengthened from last week's three-year lows.

Brent crude futures for April delivery were little changed, falling 1 cent to $65.24 a barrel by 12:37 p.m. EST.

West Texas Intermediate crude (WTI) futures for April delivery, the new front month, fell 18 cents, or 0.3 percent, to $61.61 a barrel.

Traders are awaiting the latest data on U.S. inventories from the American Petroleum Institute, set to be released at 4:30 p.m. EST and government figures due on Thursday at 11 a.m., both delayed a day due to a holiday on Monday.

U.S. crude stocks likely rose 1.3 million barrels in the week ended Feb. 16, the fourth consecutive weekly build, according to a preliminary Reuters poll.

U.S. crude oil production surpassed 10 million barrels per day (bpd) in November for the first time since 1970, hindering efforts by the Organization of the Petroleum Exporting Countries and other producers, led by Russia, to reduce bloated global inventories and prop up oil prices by cutting output.

Also bearish for oil, the dollar strengthened against other major currencies, buoyed by a rise in short-term U.S. government bond yields to a nine-year high.

Oil gained some support by a gain on Wall Street. (N)

"Oil prices and the S&P have been highly correlated, of late, with economic strength translating into improved company performance and higher energy demand," said John Kilduff, partner at investment manager Again Capital in New York.

Investors will be watching the release of minutes from the Federal Reserve's most recent policy-setting meeting, which may signal the pace of any interest rate rises. Worries about increasing inflation have rattled markets in recent weeks.