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Towards the end of the trading session in New York, US light crude oil futures were trading at $99.99 a barrel, down just 0.07% on the day. The $100-mark is proving to be an inertial stopping point for the market ahead of the update in fundamentals that we’ll get tomorrow with the release of the Energy Department's weekly inventory data.
The Fed Chief’s testimony in front of the House financial committee has been the main talking point for the financial markets today and from her comments, while stressing that nothing was set in stone and incoming data could still change things, it was quite clear that she thinks the most likely scenario is for ongoing future reductions in the size of the Fed’s monthly asset purchases. For someone seen as being as dovish as Ms Yellen, this wasn’t very dovish. While this hasn’t held back the stock market at all, it doesn’t bode that well for demand going forward, which is constraining the price of oil.
The Energy Information Administration releases its crude oil inventory report tomorrow. A survey of analysts conducted by Reuters shows a consensus estimate for a rise of 2.65 million barrels in US crude stocks. Data last week showed crude supplies climbing above the seasonal average for the past 10 years and another substantial rise in inventories of crude would be fundamentally bearish. Always part of the equation is the level of supplies of distillate fuel, though, which has been in decline in recent weeks because of unseasonably cold weather.