Oil up with Wall Street despite U.S. crude stocks build
By Gene Ramos
NEW YORK (Reuters) - Crude oil futures rose in choppy trading on Wednesday, getting a lift from U.S. equities despite pressure from a larger-than-expected increase in U.S. crude inventories and a report that Iran may consider a halt to its nuclear program.
Prices moved little after the U.S. Federal Reserve, as expected, said at the end of a two-day policy meeting that it will keep interest rates exceptionally low at least through late 2014.
"Oil got support from equities, which are on a rally mode and as support developed after the day's lows around $103 was not violated," said Hamza Khan, analyst at the Schork Group in Villanova, Pennsylvania.
The central bank said the U.S. economy had been expanding moderately and that the labor market had improved in recent months. It noted, however, that while the jobless rate had declined, it remained elevated.
Later, Fed Chairman Ben Bernanke said at a press conference that the central bank remains prepared to do more to ensure that the economic recovery continues.
"The recent rise in gasoline prices has created a temporary bulge in headline inflation and overall inflation, but we expect to pass through the system and assuming no new shocks in the oil sector - inflation ought to moderate about 2 percent this year," Bernanke said.
U.S. crude inventories rose almost 4 million barrels in the week to April 20, up for the fifth week in a row, the U.S. Energy Information Administration said. A forecast in a Reuters poll had called for a 2.7-million-barrel build. <EIA/S>
The EIA also reported larger-than-expected drawdowns of 2.24 million barrels in U.S. gasoline stockpiles, their 10th straight week of decline, and 3.05 million barrels in distillates, which include heating oil and diesel, their fourth drop in five weeks. Continued...