Oil futures received a boost Wednesday from the latest inventory data from the U.S. Energy Information Administration as well as testimony by Federal Reserve Chairman Ben Bernanke. The WTI benchmark on the New York Mercantile Exchange gained 62 cents to settle at $98.05 a barrel. Brent futures, meanwhile, rose $1.03 to end the day at $118.78 a barrel.
The EIA reported that U.S. commercial crude oil inventories declined sharply last week. According to the agency, oil stocks fell by 0.9 percent to 355.5 million barrels. The 3.1 million barrel week-on-week decline exceeded analysts' expectations. A panel of analysts surveyed by Platts, for instance, predicted a relatively modest 2.1 million-barrel draw.
Testifying before a U.S. House panel Wednesday, Bernanke hinted that the central bank may initiate a third attempt to stimulate the economy by printing more money to buy Treasury bonds. This "quantitative easing" monetary policy approach is designed to improve liquidity in the economy by enticing banks to make more loans to businesses and consumers. A third round of quantitative easing, or "QE3," would be bullish for oil because the Fed would weaken the value of the U.S. dollar by making money more widely available to banks. For investors holding currencies other than the greenback, dollar-denominated crude oil would become a better value.
The WTI peaked at $99.21 and bottomed out at $96.53 while Brent futures fluctuated from $117.01 to $119.50.
Front-month natural gas gained seven cents to settle at $4.40 per thousand cubic feet. Sizzling temperatures extending from the Midwest to the East Coast, with more to come beginning this weekend after a brief respite, have boosted cooling demand.
The intraday range for natural gas during midweek trading was $4.31 to $4.42.
Gasoline futures rose by a nickel to end the day at $3.15 a gallon. The commodity traded within a range from $3.08 to $3.175.
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