WTI consolidates losses after EIA and Fed’s statement
- Oil down 0.55% on Wednesday after EIA reports higher than expected increase in inventories.
- Federal Reserve, as expected, keeps rates unchanged.
WTI futures are falling 0.55% on Wednesday. Price bottomed after inventories data at $52.75 a barrel. It is trading in a range between $53.30 and $53.00 consolidating losses and holding near multi-month lows.
Crude prices were on recovery mode supported by an improvement in market sentiment. It weakened after the Energy Information Administration reported that US crude inventories rose by 3.5 million barrels last week, against expectations of an increase of 500K barrels. It was the largest build up since early November.
The outcome of the Federal Reserve meeting had no significant impact across markets. The central bank kept the key rate unchanged as expected and showed minor changes in the statement. Oil price held to losses, unable to extend the recovery.
On Tuesday, WTI posted the first gain in a week. Those gains are mostly gone now and the price is approaching the bottom. The immediate support is seen at $52.60 and below comes the multi-month low at $52.05.
Market participants will continue to digest the FOMC statement and Powell’s words. On Thursday, US Q4 GDP data is due. WTI is also likely to remain sensitive to news related to the spread of the Coronavirus.