WTI crude prices dipped below $96 today amid concerns of lower demand and uncertainty over the end of the Quantitatve Easing program. Ben Bernanke is scheduled today to shed some light into that matter after some FED representatives voiced opinion lately that the U.S. economy has recovered enough and the labor market is now stable. Investors have been following speculations about the possible earlier-than-expected shutdown of the central banks monetary stimulus very closely, which played a major role in the exchange rate currency fluctuations between the dollar and its peers. This also reflects the dollar-priced commodities as they tend to fluctuate inversely to the greenback. If news of an earlier end to the U.S. monetary policy comes out as a sign of a strong economy, the dollar will become even more attractive to investors and immediately surge. This will lead to a fall in oil prices.
However, latest indications show that the bond buying has further to run, which is partially supporting the sinking oil prices.
Meanwhile the American Petroleum Institute announced that U.S. crude oil inventories increased by more than half a million barrels last week and gasoline stocks rose by 3 million barrels. Analyst expectations were for a second week in a row decline, based on higher refinery activity and lower import, but APIs data rebutted that presumption. This caused U.S. July oil futures to drop below $96 and traded $95.74 a barrel and Brent crude to go under $103. EIAs weekly crude stocks report is scheduled for 14:30 GMT.
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