9/22: (6:30 am) Crude Prices Bouncing on Fed Interest Rate Hike and EIA Stats, Putin Bluster

Oil prices dropped on Wednesday, pushed lower by the Fed’s interest rate hike and insignificant moves in EIA statistics.   The WTI November contract moved down exactly $1/bbl to settle at $82.94/bbl.  As expected, yesterday the Fed raised its target interest rate by 75 basis points for the third time to a 3-3.25% range and indicated that more increases are to come.  The weekly EIA report showed crude oil inventories up by 1.14 MMbbls for the week ended September 16, versus industry expectations of about 2.2 MMbbls – not enough difference to impact the market.    Earlier on Wednesday, crude prices had moved higher following Putin’s order to mobilize reservists and a veiled nuclear threat.   This morning in early trading, WTI is up about 30 cents/bbl to the $83/bbl range.

It was an uneventful day in natural gas markets with the Henry Hub October contract up by 6.2 cents/MMbtu to settle at $7.779/MMbtu. Lower-48 production was down to only 96.2 Bcf/d, but the outlook for weather related demand was also down, so the two developments basically cancelled each other out.  In early trading on Thursday natgas is off about 5 cents/MMbtu.  EIA natgas stats are out this morning.