Oil futures failed to hold early gains and settled lower on Wednesday, weighed down by concerns that higher borrowing costs will likely hurt growth and the outlook for fuel demand. <\/p>\n
The Federal Reserve today decided to leave interest rates unchanged at 5.25 to 5.5%, in an effort to support its dual goals of maximum employment and inflation at a rate of 2% over the longer run.<\/p>\n
West Texas Intermediate Crude oil futures for December ended down $$0.58 or about 0.7% at $80.44 a barrel.<\/p>\n
Brent crude futures were down $0.19 or about 0.22% at $84.83 a barrel a little while ago.<\/p>\n
Data from U.S. Energy Information Administration (EIA) showed crude inventory in the U.S. rose by 0.774 million barrels in the week ended October 27, less than an expected increase of 1.3 million barrels.<\/p>\n
Gasoline stockpiles increased by 0.1 million barrels last week, as against forecasts for a drop of about 0.8 million barrels, while distillate stockpiles fell by 0.8 million barrels in the week, against expectations for a 1.5 million-barrel drop, the EIA data showed.<\/p>\n
The Fed’s accompanying statement was little changed from September, although the Fed did upgrade its assessment of U.S. economic activity.<\/p>\n
The Fed said recent indicators suggest economic activity expanded at a “strong pace” in the third quarter after previously saying activity has been expanding at a “solid pace.”<\/p>\n
The latest statement also said, “Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation.”<\/p>\n
With regard to the outlook for rates, the statement suggests the Fed is still considering additional rate hikes in an effort to return inflation to its 2% objective.<\/p>\n
The central bank said it will consider the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments in determining whether further increases may be appropriate. <\/p>\n