Oil Slips On Surprise ECB Rate Cut, EIA Data Supports
NEW YORK, Sept 4 (Reuters) - Crude oil futures traded lower on Thursday after a surprise rate cut from the European Central Bank boosted the dollar and hit commodities priced in the U.S. currency.
The ECB cut interest rates to a record low, unexpectedly bringing borrowing costs close to zero to lift inflation from rock-bottom levels and support the stagnating euro zone economy.
The move prompted the euro to fall to its lowest in more than a year against the dollar.
"A stronger dollar is hitting crude futures today, somewhat diminishing the positive broader market impact from the surprise ECB rate cut," Andrey Kryuchenkov, an analyst at VTB Capital, said.
The losses, however, were limited by a drop in U.S. crude oil inventories, with data from the U.S. Energy Information Administration (EIA) showing a 905,000-barrel fall last week. U.S. gasoline stocks dropped 2.3 million barrels.
"The report is mildly supportive, due mostly to the large gasoline inventory drawdown," said John Kilduff, a partner at Again Capital LLC in New York.
"The improving economic conditions and lower retail prices for gasoline are having an effect. Gasoline demand remains strong as a result."
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