Brent crude oil fell on Wednesday after an unexpected rise in US gasoline stockpiles reignited worries that the summer driving season's demand in the number one oil consuming nation may be weaker than anticipated. The commodity traded at $103.21 at 9:18 GMT on Wednesday morning.
On Tuesday, the American Petroleum Institute released data that showed that US gasoline inventories jumped by 3 million barrels last week. The figures indicated that the nation is well supplied as it moves into the summer, which tends to be a peak driving season.
However, the dollar fell from its 34 month high, which lent support to Brent prices. The dollar has been shaky ahead of Federal Reserve Chairman Ben Bernanke's congressional address, scheduled for 2:00 GMT on Wednesday. Investors will be watching the address closely for clues about the Fed's future plans for the US' monetary policy.
Recent quantitative easing programs have flooded the financial markets with billions of dollars over the past few years which in turn helped lift Brent prices. However, many are speculating that Bernanke will reveal that the central bank is planning to ease up on its monetary stimulus, which could be bearish for oil.
According to CNBC, some are expecting Bernanke to remain cautious about cutting out the current $85 billion asset purchase program. If Bernanke suggests that the Fed will continue will the current policy for the time being, commodities may see a lift.
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Following Bernanke's comments, the minutes from the last Federal Reserve policy meeting will be released. The minutes are expected to provide a more detailed account of the bank's plan to eventually exit from the quantitative easing policy.
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