WTI oil futures under pressure ahead of U.S. supply data

Investing.com - West Texas Intermediate oil futures were under pressure on Wednesday, as market participants awaited the release of weekly supply data out of the U.S. later in the session to gauge the strength of oil demand from the world’s largest consumer.

On the New York Mercantile Exchange, crude oil for delivery in March lost 76 cents, or 1.64%, to trade at $45.48 a barrel during European morning hours. Prices held in a range between $45.34 and $45.82.

A day earlier, New York-traded oil futures surged $1.08, or 2.39%, to settle at $46.23 a barrel as the U.S. dollar weakened after data showed that orders for durable goods unexpectedly dropped 3.4% in December.

Wednesday’s government report was expected to show that U.S. crude oil stockpiles rose by 4.1 million barrels last week, while gasoline stockpiles were forecast to increase by 0.4 million barrels.

After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by a whopping 12.7 million barrels in the week ended January 23.

The report also showed that gasoline stockpiles decreased by 5.0 million barrels, while distillate stocks fell by 670,000 barrels.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery shed 56 cents, or 1.13%, to trade at $49.04 a barrel. On Tuesday, Brent for March delivery jumped $1.44, or 2.99%, to close at $49.60.

Oil prices have fallen nearly 60% since June as the Organization of Petroleum Exporting Countries resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.

Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged up 0.25% to hit 94.48 after falling to almost one week lows of 93.95 in the previous session.

Market players looked ahead to the outcome of the Fed's policy meeting later in the day, at which it is widely expected to keep policy on hold.

Investors will be scrutinizing the Fed's statement for wording that reflects expectations that interest rates will remain on hold near zero levels for some time to come.