Oil Prices Steady on Mixed U.S. Oil Inventory Report

VIENNA (DTN) – Oil prices fluctuated between small gains and losses Thursday morning, after a weekly U.S. government oil inventory report sent mixed signals about the state of oil and fuel demand.

NYMEX-traded WTI for October delivery rose by $0.32 to $64.05 bbl, and ICE Brent futures contract for November delivery rose by  $0.27 to $68.22 bbl.

October RBOB gasoline futures slid by $0.0040 to $2.0247gallon, and the front-month ULSD contract rose by $0.0030 to $2.3578 gallon.

Following the first Federal Reserve rate cut since December, the U.S. dollar index jumped 0.525 points to 97.045 against a basket of foreign currencies.

The U.S. Energy Information Administration on Wednesday (9/17) reported commercial crude oil inventories shrank by 9.3 million bbl last week as exports soared to a 21-month high. At the same time, a surprisingly large build in distillate fuel oil inventories raised concerns over the health of the U.S. economy and fuel demand. Nationwide distillate fuel oil stocks jumped 4.7 million bbl, or 4%, in a single week to 120.6 million bbl.

The Fed’s 25-basis point cut lent rather tepid support to markets — given the largely expected, and priced-in, move. Chairman Jerome Powell in remarks delivered Wednesday suggested more rate cuts to come, reiterating, however, that inflation risks have not subsided.

Powell suggested the central bank will continue to apply caution in the timing future rate cuts. Investors expect another two 25-basis-point cuts this year.