U.S. oil futures were on track to extend gains to a fifth straight session on Wednesday after a report on inventories showed a greater-than-expected weekly drop. Investors also were awaiting a highly anticipated Federal Reserve policy meeting that’s expected to deliver a quarter percentage point interest rate cut.
West Texas Intermediate crude for September delivery CLU19, +0.55% on the New York Mercantile Exchange gained 52 cents, or 0.9%, at $58.57, after gaining 2.1% on Tuesday. The contract is on pace for a fifth straight gain, which would match its longest stretch of positive settlements since the period ended July 10.
Meanwhile, October Brent crude BRNV19, +0.65%, the global benchmark, added 53 cents, or 0.8%, to trade at $65.16 a barrel on the ICE Europe exchange after a 1.6% advance in the prior session.
The American Petroleum Institute said late Tuesday that U.S. oil inventories fell by 6.024 million barrels last week, according to sources and news reports. The trade group also reportedly saw gasoline stocks fall 3.135 million barrels, while inventories of distillates were down 890,000 barrels.
At 10:30 a.m. Eastern, the more closely followed Energy Information Administration’s weekly inventory report is due. Analysts surveyed by The Wall Street Journal, on average, look for crude inventories to fall 2.1 million barrels, while gasoline stocks were expected to decline 1.8 million barrels and distillates were forecast to rise by 700,000 barrels.
Meanwhile, the Fed is seen as virtually certain to cut interest rates when it concludes a two-day meeting at 2 p.m. Eastern Time, about a half-hour before crude’s settlement. Oil traders said the central bank action could provide a lift to crude by soothing worries about demand fostered by signs of a slowing global economy, though the main catalyst could be through a weaker U.S. dollar.
“The onset of the Fed easing cycle should be supportive for commodities as the last non-recessionary rate cut saw oil nearly double in the mid-$90s,” wrote Ed Moya, senior market analyst at brokerage Oanda, in a Wednesday research note.
The dollar, as gauged by the ICE Dollar Index DXY, +0.04%, was up 0.1% at 98.11, but has been gained a slight 0.1% over the week thus far.
Meanwhile, September natural gas NGU19, +3.98% gained 3 cents, or 1.6%, to 2.169 per million British thermal units, recovering some ground after notching the lowest close for a front-month contract since May 26, 2016.
September heating oil HOU19, +0.72% rose 2 cents, or 0.8%, to $1.969 a gallon, while September gasoline RBU19, +0.68% picked up a penny, or 0.6%, to $1.858 a gallon.
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