Oil futures muted by fears of Fed rate hike; stockpiles weigh
ecPulse
2014-09-18 08:21AM UTC
Oil futures traded sideways early Thursday, with Brent holding below $99 a barrel as the dollar hit a four-year high amid fears of a sooner increase in U.S. interest rates. The sentiment in oil markets was hurt yesterday after the dollar hit its highest level in more than four years against a six-currency basket, after the Federal Reserve hinted that a hike in U.S. interest rates might happen faster than expected. The dollar surge as well as a rise in U.S. crude inventories weighed on prices and kept pressure on the dollar-denominated commodities in general. As of the 04:00 am ET: - West Texas Intermediate for October delivery fell 0.21% to $94.21 a barrel on the New York Mercantile Exchange - Brent for October delivery fell 0.41% to $98.56 a barrel on the ICE Exchange in London Yesterday, Yellen emphasized that the FOMC`s view of the path of future interest rates are contingent on the economic outlook. If the economy improves quicker than expected, a faster than expected increase in rates would follow; if the economy improves at a pace slower than the Fed expects, then rates would increase slower than the FOMC may currently expect. The Fed kept the phrase "considerable time" when describing how long it expects to keep interest rates near zero after the conclusion of its QE program. Yellen said that the labor market continues to make "gradual progress" towards the Fed`s objectives, but it still hasn`t recovered. Yellen added that third quarter GDP appears to be expanding at a moderate pace. On the economic front, today`s jobless claims report which, very importantly, covers the sample week for the monthly report, is expected to resume its downward path. Jobless claims are at levels but have been inching higher in recent. Also weighing on crude prices, U.S. crude stocks rose 3.7 million barrels despite an expected slump in the last week, according to the Energy Information Administration (EIA). Analysts called for a decrease of 1.6 million barrels.
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