Investing.com -- U.S. crude futures closed slightly lower, in spite of modest increases late in the session after the Federal Reserve left its benchmark interest rate unchanged at near-zero levels on Thursday afternoon.
On the New York Mercantile Exchange, WTI crude for October delivery traded in a range between $46.35 and $47.70 a barrel, before settling at $46.97, down 0.18 or 0.59% on the session. One session earlier, Texas Long Sweet futures soared more than 5.3% during Wednesday's session, marking its highest upward move since a three-day stretch late last month when U.S. crude futures skyrocketed by more than 25%.
On the Intercontinental Exchange (ICE), brent crude for November delivery wavered between $48.34 and $50.15, before closing at $49.19, down 0.56 or 1.12% on the day. The spread between the international and U.S. domestic benchmarks for crude stood at $2.22, below Wednesday's level of $2.60 at the close of trading.
On Thursday afternoon, the Federal Open Market Committee announced that it is keeping its benchmark Federal Funds Rate at its current level between zero and 0.25%, citing widespread concerns related to global economic weakness. A rate hike is expected to bolster the value of the dollar, as foreign investors look to capitalize on higher yields. As a result, the U.S. dollar declined sharply in the hour following the announcement, falling to 94.60, its lowest level in three weeks.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates. When asked about the Fed's global economic outlook, Fed chair Janet Yellen blamed softness in the commodity markets for having a negative impact on a number of countries in the emerging markets, as well as Canada. Yellen also noted that large drags from energy and import prices should dissipate in the near future allowing U.S. inflation to move back toward the Fed's targeted goal of 2%. Long-term inflation has remained below the 2% target for every month over the last three years.
Meanwhile, energy traders continued to digest bullish supply data from Wednesday, when the U.S. Energy Information Administration (EIA) said U.S. crude inventories fell by 2.1 million barrels for the week ending on September 11. At 455.9 million barrels, U.S. crude oil inventories still remain near levels not seen for this time of year in at least the last 80 years.
Crude futures are down by more than 50% from its peak above $100 a barrel last summer, after OPEC rattled global energy markets with a strategic decision to keep its production ceiling unchanged. The tactic triggered a protracted battle between the U.S. and OPEC for global market share, depressing prices amid a glut of oversupply.