“Given the risks to the outlook, I consider it appropriate for the committee to proceed cautiously in adjusting policy,” Ms. Yellen said Tuesday before the Economic Club of New York. She didn’t give details about the timing of the next rate increase. Fed policy makers are set to meet next April 26-27. This hint left the market rally and continually convinced the investors of a strong US economy. At the same time, the stable of US dollar just missed the expectation of rising rate which on the contrary lift the oil price in the morning of Wednesday. Followed by this, EIA’s weekly report puts the high threats to oil price from which we see the increasing inventory and signs of decreasing demand. Despite of the weak dollar, the oil erased the former profits and almost goes into $37 per barrel.
Oil’s month-long rally has been losing steam in recent days after widespread warnings that stockpiles are still too high to justify a rebound in prices. U.S. crude inventories are at their highest levels in more than 80 years.
The market is getting support, however, from motor fuel stockpiles that fell further than expected and crude stockpiles that didn’t grow as much as expected last week, according to newly released government data.
The U.S. Energy Information Administration said Wednesday that combined stocks of gasoline and distillate, which include heating oil and diesel, fell by 3.6 million barrels, about 600,000 more than analysts had expected. That drain was also larger than the addition to crude stockpiles, 2.3 million barrels, compared to analysts’ expectations for a 3.5-million-barrel addition.
Futures initially added to gains on the news, but have since retreated. The numbers weren’t far enough from expectations to get traders to reassess the country’s supply and demand, so they are focusing more on technical trading and momentum, and selling off because crude is bumping up against recent highs, said Ric Navy, senior vice president for energy futures at brokerage R.J. O’Brien & Associates LLC.