Crude oil prices continued to fall yesterday as oversupply fears resurfaced, while stocks and the US dollar were little changed ahead of a widely anticipated speech by Federal Reserve Chair Janet Yellen.
Mr Yellen, who spoke at the Economic Club of New York in the evening after Wall Street closed, was expected to offer hints on the central bank’s latest thinking weeks after the Fed forecast two further interest-rate hikes this year, down from a forecast of four following its December meeting.
On Wall Street, energy stocks weighed the most on the benchmark S&P 500, but gains in Apple, Microsoft, Facebook and other technology sector bellwethers capped losses there and kept the Nasdaq index afloat.
The Dow Jones industrial average fell 29 points, or 0.17 per cent, to 17,506.39, the S&P 500 lost 2.1 points, or 0.1 per cent, to 2,034.95 and the Nasdaq Composite added 11.29 points, or 0.24 per cent, to 4,778.08.
The pan-European FTSEurofirst 300 stock index was up 0.3 per cent and MSCI’s index of shares in major world markets slipped 0.2 per cent.
Brent crude oil fell three per cent to $39.06 a barrel and US crude lost 3.3 per cent to $38.09.
Oil prices are up some 50 per cent from 12-year lows around $27 touched in January but the rally has eased in recent days as supply looks set to keep rising.
“The amount of verbal intervention, which has obviously helped the market greatly over the past two months, combined with a production slowdown in the US, has probably taken [oil] as far as it can; now the market really wants to see some action,” said Saxo Bank senior manager Ole Hansen.
A preliminary Reuters survey of analysts showed US oil stockpiles measured by the American Petroleum Institute were expected to reach record highs.
The US dollar was little changed against a basket of major currencies as traders awaited clues on the rate hike path for the Fed from comments by Ms Yellen.
The euro fell less than 0.1 per cent to $1.1189 and the Japanese yen rose less than 0.1 per cent to 113.37.
“The market is really sitting on the sidelines,” said Jason Leinwand, managing director at derivatives advisory firm Riverside Risk Advisors in New York. “There is really no reason to put any positions on when there’s so much uncertainty about what [Ms Yellen] may say.”
Benchmark 10-year Treasury notes were last up 5/32 in price for a yield of 1.8544 per cent, down from 1.872 per cent late on Monday.
Spot gold rose 0.4 per cent to $1,225.80 per ounce after hitting a one-month low on Monday.