WTI crude traded close to its highest price in a week, following the Federal Reserve’s announcement to reduce its monthly purchases and the drop in U.S crude stockpiles.
Futures were trading slightly flat after U.S crude inventories declined by 2.94 million barrels to 372.3 million barrels in the week ended Dec 13, dropping for a third week, reports from the Energy Information Administration confirmed. The Federal Reserve (Fed) announced it will begin to reduce its $85 billion monthly bond purchases to $75 billion, starting next year January, Fed Chairman Ben S. Bernanke said.
“The Fed has given an endorsement to the growth that’s coming through with this decision,” Chief strategist at CMC Markets Michael McCarthy said. “From a technical point of view, West Texas is bumping up against resistance,” he added.
West Texas Intermediate for January delivery came in at $97.71 per barrel on the New York Mercantile Exchange at the time of writing. While the European benchmark for February settlement declined 0.2% to $109.41 per barrel on the ICE Futures Europe exchange. Brent crude was at a premium of $11.42 to WTI for the same month.
WTI Crude – Federal Reserve Tapering
On Wednesday, the Federal Reserve (Fed) concluded its two-day meeting with an announcement to begin scaling-back on the central bank’s monthly asset purchases by reducing it by $10 billion.
The Federal Reserve’s purchases will be divided into $35 billion in mortgage bonds and $40 billion in Treasuries starting from January next year, the Fed Chairman confirmed.
The unemployment rate dropped to 7% in November, dropping to the lowest level in five years. According to the International Energy Agency, the US; the largest oil consumer in the world, is expected to account for nearly 21% of global demand this year.
WTI Crude – Fuel Supplies
A report from EIA showed that crude stockpiles in Oklahoma dropped by 600,000 barrels to 40.6 million in the week ended December 13.
Gasoline inventories added 1.34 million barrels; lower than analysts’ forecast of a 1.5 million rise, a report from the Energy Department Statistical arm confirmed.
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