Crude Oil Gives Back Gains as EIA Data Shows Inventories Fell Less than Expected

Crude oil prices traded lower on Wednesday, failing to hold on to earlier gains after the release of U.S. crude stockpile data. Official data from the Energy Information Administration showed U.S. crude inventories fell by 900,000 barrels, less than expected.

Earlier in the session, the market moved higher after the American Petroleum Institute reported on Tuesday that U.S. crude stockpiles fell by 5.2 million barrels last week. This figure was three times more than that projected by industry analysts.

Oil also found support as the U.S. Dollar weakened against a basket of currencies after cautious comments on the U.S. economy by Federal Reserve Chair Janet Yellen, who virtually ruled out a July interest rate hike.

In other industry news, top crude exporter Saudi Arabia said it may reprise its role of balancing supply and demand once the global market for oil recovers.

In testimony before the House Financial Services Committee, Fed Chair Janet Yellen said she believes the recent weakness in job creation is “transitory” and does not reflect an otherwise growing economy.

On her second day of testimony, Yellen sounded more optimistic than she did over the past couple of weeks, a time during which the Fed backtracked on what had been an aggressive path forward for interest rates.

“We are seeing a pickup in growth. There’s been a sharp increase in consumer spending,” Yellen told members of Congress. “I’m very hopeful that we will see a pickup in growth. We will be watching for that as we assess the economy.”

U.S. stocks traded mostly higher on Wednesday, trying for a third straight day of gains, as the U.K. vote on whether to leave the European Union approached. The major indices came off their highs after U.S. crude stocks declined less than expected.

Early in the session, the Dow Jones Industrial Average traded up 29 points, or 0.15 percent, to 17,856. The S&P 500 gained 2 points, or 0.10 percent, to 2,091. The NASDAQ Composite rose 1 point, or 0.03 percent to 4,845.

In economic news Wednesday, existing home sales rose 1.8 percent in May. The FHFA House Price Index rose 0.2 percent on a seasonally adjusted basis in April from the previous month, while March’s figure was upwardly revised to a 0.8 percent increase.

Gold prices traded in a tight range in New York while hovering near its lowest level in over a week on Wednesday. Spot gold was nearly flat at $1268.49 an ounce. August Comex Gold was at $1269.00, down $3.60 or -0.28%. Firmer U.S. equity markets helped pressure gold as they served as an indication that Britain would vote to remain in the European Union.