The price of oil fell Wednesday, dragged down by expectations of rising crude inventories and a further cut in U.S. central bank stimulus.
Benchmark U.S. crude for March delivery was down 14 cents to $97.27 a barrel at 12:10 a.m. ET in electronic trading on the New York Mercantile Exchange. The contract surged 1.8 per cent or $1.69 to close at $97.41 a barrel Tuesday.
Analysts said U.S. oil supplies rose last week, suggesting weaker demand. Weekly stockpiles data is likely to show increases of 2.1 barrels in crude oil stocks and 1.6 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
Investors are also cautious ahead of the outcome of the Federal Reserve meeting that ends Wednesday. Officials are widely expected to cut the central bank’s monthly bond buying that has underpinned an economic recovery.
Oil prices have been underpinned by the Fed’s stimulus because it has kept the dollar from strengthening, making oil more affordable for traders using other currencies. The low interest rates created by the bond buying have also attracted investors to commodities like crude oil in search of higher profits.
Brent crude, used to set prices for international varieties of crude, was up 11 cents at $107.52 on the ICE exchange in London.
In other energy futures trading in New York:
— Wholesale gasoline was up 0.7 cent at $2.645 a gallon.
— Natural gas fell 4.3 cents to $4.99 per 1,000 cubic feet
— Heating oil price was up 0.3 cent at $2.997 a gallon.
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