Oil Futures Pushed Down by Higher Inventories
Oil prices fell after the Federal Reserve cut interest rates and a government report said fuel supplies unexpectedly fell last week.
Light, sweet crude for June delivery fell $2.17 to settle at $113.46 a barrel on the New York Mercantile Exchange.
The Fed, as expected, said it will cut the federal funds rate by a quarter percentage point to 2 percent. Interest rate cuts tend to weaken the dollar, and investors buy commodities such as oil as a hedge against inflation when the greenback falls.
Oil prices fell sharply earlier in the session after the Energy Department reported a jump in crude oil and distillate fuel inventories last week.
In its weekly report, the Energy Information Administration (EIA) said crude inventories rose by 3.8 million barrels, more than double the increase analysts surveyed by Platts expected.
Inventories of distillates, which include heating oil and diesel fuel, rose by 1.1 million barrels, more than seven times the analysts’ forecast.
In Nymex trading, May gasoline futures fell 0.8 cent to settle at $2.9312 a gallon, and May heating oil futures lost 6.95 cents to settle at $3.1770 a gallon. June natural gas futures rose 0.1 cent to settle at $10.843 per 1,000 cubic feet.
