Oil Prices Edged Down on Mixed US Stockpiles

SECAUCUS, NJ (DTN) – Oil prices ended lower on Thursday (9/17), reacting to a mixed U.S. stockpile picture and a modest Federal Reserve rate cut that is unlikely to significantly boost the economy.

The NYMEX WTI futures contract for October delivery settled down $0.33 at $63.72 bbl, while the ICE Brent futures contract for November delivery fell $0.36 to $67.59 bbl.

October RBOB gasoline futures slid $0.0115 to $2.0115 gallon. The front-month ULSD contract retreated $0.0118 to $2.3430 gallon.

In contrast, the U.S. dollar index strengthened by 0.440 points to 96.955 against a basket of foreign currencies.

The U.S. Energy Information Administration on Wednesday (9/17) reported commercial crude oil inventories shrank by 9.3 million bbl last week as exports soared to a 21-month high. At the same time, a surprisingly large build in distillate fuel oil inventories raised concerns over the health of the U.S. economy and fuel demand. Nationwide distillate fuel oil stocks jumped 4.7 million bbl, or 4%, in a single week to 120.6 million bbl.

Concerns on US economic growth going forth also gripped markets after the Fed executed just a 25-basis point cut on Wednesday (9/17) versus expectations of some on Wall Street for a larger reduction.

This lent tepid support to markets, especially after Fed Chair Jerome Powell acknowledged labor market weakness and suggested there will be more rate cuts, without committing to their size or timeline. Investors, however, expect another two 25-basis-point cuts this year.

These factors counteracted European Union efforts to present to member states on Friday the revised 19th package of sanctions against Russia over the Ukraine war, to better coordinate with the Trump administration the phasing out Russian oil imports.

The EU’s sanctions package comes as President Donald Trump conditioned fresh U.S. sanctions on NATO and EU countries ceasing all purchases of Russian oil.

The reviewed package may include secondary sanctions on buyers of Russian oil, and, according to a social media statement by European Commission President Ursula von der Leyen, will contain a plan to more quickly phase out purchases of Russian energy.

While Russian flows to Europe have plummeted since the invasion of Ukraine, two landlocked NATO and EU countries, Slovakia and Hungary, are currently exempt from the EU embargo on Russian oil imports, given their limited supply alternatives. Under their current agreement, EU countries have until 2028 to completely faze out Russian energy purchases.