The price of crude oil was extending gains Wednesday morning as traders await cues from the official inventories data from the EIA. Also, the U.S. dollar was trading lower versus a basket of currencies amid hopes for additional monetary stimulus measures from the Federal Reserve, helping crude prices.
Earlier today, the International Energy Agency in its monthly oil market report, maintained its global oil demand forecast for 2013 even as demand grew in the second quarter of 2012.
Light Sweet Crude Oil (WTI) futures for October delivery, added $0.56 to $97.73 a barrel. Yesterday, oil ended higher as investors await cues from the Federal Reserve meeting this week and the weekly crude oil inventory data. Traders also await a ruling by Germany's constitutional court on the country's participation in Europe's permanent bailout fund due Wednesday.
Tuesday after the market hours, the API said U.S. crude oil inventories moved up 221,000 barrels while gasoline stocks dipped 4.16 million barrels in the weekended September 07.
This morning, the U.S. dollar dived to a fresh four-month low versus the euro, after lawmakers ratified the ESM, and extended losses against sterling. The buck slipped back to a seven-month low versus the yen and a fresh four-month low against the Swiss franc.
In economic news from the euro zone, Germany's inflation, measured by the harmonized index of consumer prices (HICP), rose to 2.2 percent in August from 1.9 percent in July, final data released by the Federal Statistical Office confirmed. At the same time, the consumer price index (CPI) climbed 2.1 percent year-on-year in August, up from July's 1.7 percent. This was slightly above the flash estimate of 2 percent.
Meanwhile, industrial production in the euro area increased in July, recovering from the previous month's decline, and the rate of growth exceeded economists' forecast, data released by statistical office Eurostat showed. Industrial production increased 0.6 percent on a monthly basis in July, reversing June's 0.6 percent decrease. Economists were looking for a 0.1percent gain.
Germany's Federal Constitutional Court on Wednesday allowed the ratification of the European Stability Mechanism (ESM), but with certain conditions. The court said Germany must cap its bailout fund share at EUR 190 billion
Traders will look to the wholesale inventories report from the U.S. Commerce Department, due out at 10 a.m ET. Economists expect wholesale inventories at the end of July to show a 0.4 percent increase compared to a 0.2 percent drop in June.
Today during trading hours, the EIA will release its crude oil inventories report for the weekended September 07. Analysts expect crude oil inventories to shed by 2.90 million barrels and gasoline stock to 1.70 million barrels last week.
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