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OIL: Crude Moderately Lower Ahead Of FOMC & EIA Inventory Data

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After rising this week, oil prices are moderately softer ahead of the Fed decision later today. Geopolitical developments in the Middle East are also being watched closely following explosions in Lebanon, which Hezbollah is blaming Israel for. WTI is down 0.5% to $70.84/bbl after reaching a low of $70.78, while Brent is down 0.5% to $73.35 after falling to $73.27. The USD index is down 0.1%. 

  • Bloomberg reported that US crude inventories rose 1.96mn barrels last week, according to people familiar with the API data, which has weighed on prices today. Gasoline and distillate rose 2.3mn barrels each. The official EIA data is out today.
  • Later the FOMC decision is announced and the revised dot plot released. Bloomberg consensus is forecasting a 25bp cut (see MNI Fed analyst outlook and MNI Fed Preview). There is significant speculation that the first move will be 50bp with the market pricing in 1.5 25bp moves. An outsized 50bp would likely drive crude higher on optimism re the US demand outlook.
  • There are also US August housing starts/permits, final euro area August CPI and UK August CPI/PPI. The ECB’s McCaul and Buch speak.
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After rising this week, oil prices are moderately softer ahead of the Fed decision later today. Geopolitical developments in the Middle East are also being watched closely following explosions in Lebanon, which Hezbollah is blaming Israel for. WTI is down 0.5% to $70.84/bbl after reaching a low of $70.78, while Brent is down 0.5% to $73.35 after falling to $73.27. The USD index is down 0.1%. 

  • Bloomberg reported that US crude inventories rose 1.96mn barrels last week, according to people familiar with the API data, which has weighed on prices today. Gasoline and distillate rose 2.3mn barrels each. The official EIA data is out today.
  • Later the FOMC decision is announced and the revised dot plot released. Bloomberg consensus is forecasting a 25bp cut (see MNI Fed analyst outlook and MNI Fed Preview). There is significant speculation that the first move will be 50bp with the market pricing in 1.5 25bp moves. An outsized 50bp would likely drive crude higher on optimism re the US demand outlook.
  • There are also US August housing starts/permits, final euro area August CPI and UK August CPI/PPI. The ECB’s McCaul and Buch speak.