Brent crude oil futures trading down nearly four percent Wednesday close

Brent crude oil futures eased down towards the $67 to $68 a barrel range in trading on Wednesday, weighed by an unexpected increase in US crude inventories. In London, November ICE Brent crude ended down $2.54, or 3.6 percent, at $67.99 a barrel, trading from $67.57 to $70.48.

Crude supplies jumped by 2.8 million barrels and gasoline by 5.4 million barrels last week, according to the Energy Information Administration. Analysts had expected crude levels to decline by nearly that much, according to a survey by Platts, the energy information arm of McGraw Hills Cos.

Even with supplies more than ample, oil prices have remained close to $70 per barrel partly because of the battered US dollar.

Crude oil is priced in dollars so it becomes cheaper when the dollar falls. The dollar is at a nearly one-year low against the euro, and fell Wednesday after the Federal Reserve said it would keep interest rates at a record low, near zero. Critics have complained that the Fed appears to be printing money to pay for the government’s spending binge, and that hurts the dollar.

Even with the dollar falling again Wednesday, the amount of oil and gasoline in the ground right now is difficult to ignore. There is not much to suggest that demand will rebound soon and draw down huge supplies of fuel.

Tags:  brent oil prices, futures, trading