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Wednesday, March 18, 2015

Oil prices end lower for sixth time in a row

Traders bet that inventory report will show weekly increase in crude-oil supplies

U.S. oil futures marked a loss for the sixth session in a row on Tuesday, 17 March 2015 holding ground at a six-year low as traders bet that coming reports will show another weekly increase in crude-oil supplies. 

Crude oil for delivery in April lost 42 cents, or 1%, to settle at $43.46 a barrel on the New York Mercantile Exchange — off the day's intraday low of $42.63. Prices again settled at their lowest level since March 11, 2009 and they've tallied a six-session loss of more than 13%. 

The highly anticipated meeting of the U.S. Federal Reserve's Open Market Committee (FOMC) began Tuesday and ends early Wednesday afternoon. The market place is wondering about the timing of the FOMC raising interest rates, with some reckoning a hike could come as early as June and others wondering if a rate increase will even occur this year. 

Many look for the Fed to take the word “patient” out of its statement, regarding when to decide to raise interest rates. The FOMC will also release its latest economic projections Wednesday, and Fed Chair Janet Yellen will hold a press conference after the FOMC meeting. 

Oil prices were weaker and Nymex futures poked to another six-year low Tuesday. An already glutted world oil market faces the prospect of Iranian oil exports re-entering the world supply equation. Western nations and Iran are presently meeting and trying to agree on a deal that would lift Western sanctions against Iranian oil. Slumping oil prices are a bearish underlying factor for most raw commodity markets, including the precious metals.
The U.S. dollar index saw another corrective pullback Tuesday after hitting a 12-year high last week. 

U.S. economic data released Tuesday included new residential construction, which was a big miss on the downside. February housing starts declined 17.0% to 897,000 from an upwardly revised 1.081 million (from 1.065 million) while the consensus expected a decline to 1.041 million. Record snowfall in the Northeast and extreme cold in the Midwest likely played a large part in curtailing new construction. Housing starts in these regions declined 45.0% in February, from 262,000 in January to 144,000. Those regions accounted for 64.0% of the entire February decline in housing starts. 

Among other energy products, April gasoline on Nymex was little changed at $1.73 a gallon, while April heating oil ended at $1.694 a gallon, down about a half cent. 

Natural gas for April settled at $2.855 per million British thermal units, up 13.9 cents, or 5.1%
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