The meeting notes showed Fed officials voted in unison last
month not to raise interest rates, and appear not to be in any
rush to hike rates, CNBC reported. The dollar index fell sharply
from 94.5 to 94 before rebounding, paring its loses.
Earlier in the day, two US economic reports were interpreted as
bearish. US producer prices fell 0.8% in January, pulled lower
by falling energy costs, the Department of Labor said.
And home building slowed in January, as housing starts declined
2% to a seasonally adjusted annual rate of 1.065 million, the
Department of Commerce said.
The "US macroeconomic data was somewhat disappointing, but
uncertainty over the Greek debt standoff still helped the US
dollar to a modest gain, with dollar strength most often
associated with commodity weakness," Citi Futures and OTC
Clearing analyst Tim Evans said in a note.
US crude inventories are expected to have increased 3.1 million
barrels during the week that ended February 13, Platts analysis
and a survey of oil analysts showed Tuesday.
Energy Information Administration data showed crude stocks
swelling to a record 418 million barrels in the week that ended
February 6.
"The market is squaring up for the EIA report, which will
probably show a good build," said Robert Yawger, director of the
futures division at Mizuho Securities.
The American Petroleum Institute will release its weekly stocks
data at 4:30 pm EST (2130 GMT) Wednesday. EIA is scheduled to
release its weekly data at 11 am EST (1600 GMT) Thursday.
The release of weekly inventory data was delayed a day because
Monday was a US holiday.
The ICE Brent-WTI spread narrowed 52 cents to $7.72/b Wednesday.
Still, the spread has widened significantly since mid-January
when WTI traded briefly above ICE Brent.
Bulging US crude stocks have weighed on WTI prices, Commerzbank
said in a note Wednesday.
"Brent, on the other hand, is profiting from the renewed shift
in focus towards supply risks. Libya for example is exporting
virtually no more oil [exports] because all its oil terminals
are now closed due to the unrest," Commerzbank said.
ULSD BACKWARDATION WIDENS
ULSD March futures settled Wednesday 7.38 cents above April
delivery, the largest premium seen for the prompt contract over
the second month contract since February 2014.
Cold weather in the eastern US and supply concerns stemming from
an ongoing refinery strike are supporting prompt prices, said
Sandy Fielden, director of energy analytics at RBN Energy.
"This is classic March-April when the winter ends and heating
oil is less in demand, you get a seasonal blip. There is a
reduction in heating oil demand because everyone should be
thawed out by April," Fielden said.
--Geoffrey Craig,
geoffrey.craig@platts.com
--Edited by Keiron Greenhalgh,
keiron.greenhalgh@platts.com
© 2015 Platts, The McGraw-Hill Companies Inc. All rights reserved.
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