March crude oil traded lower during the early morning hours, as concerns mounted over increasing US supplies and Japan's government debt rating was lowered by one notch. Some traders suggested that March crude oil garnered upside momentum Wednesday afternoon after the FOMC meeting comments. The Fed's stance on maintaining a low interest rate environment for an extended period of time along with staying the course with QE2 fueled speculation for higher inflation. That also seemed to be a factor that widened the spread relationship between Brent and WTI crude oil this morning to the widest levels in two years. Meanwhile, US crude oil is contending with ample supplies, including a 862,000 barrel boost in Cushing supplies to 37.7 million barrels. Yesterday's EIA inventory report showed a larger than expected crude oil build of 4.836 million barrels. This brings them to 13.888 million barrels above year ago levels. Part of the larger than expected build came from a sizeable jump in crude oil imports for the week to 9.385 million barrels per day compared to 8.999 million the previous week. The refinery operating rate was 81.8%, down 1.2% from last week. This compares to 78.45% last year and the five year average of 83.99%.
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