S&P Global Platts says analysts expected oil inventories to grow and gasoline stockpiles to shrink by a smaller amount.
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US crude futures jumped 2.5 percent to $45.12 a barrel, while Brent crude futures were up 1.8 percent at $46.72.
Oil prices climbed as much as 3 percent on Wednesday after a third surprise weekly drop in US crude stockpiles boosted the demand outlook in the world’s largest oil consumer. That helped energy companies, and Anadarko Petroleum rose $1.62, or 2.8 percent, to $59.89 while Chevron added 94 cents, or 1 percent, to $98.64.
Until recently, many Fed watchers had thought a rate hike was likely this week. “A rate hike is probable in December, but it has once again become clear that rates will go up only very gradually”, said Philippe Gijsels, head of research at BNP Paribas Fortis. Probability of a rise at November’s Fed meeting was 23%, and in December 48% vs. 45%.
The Federal Reserve Open Market Committee (FOMC) will announce its latest policy decision on Wednesday. Fed leaders generally prefer votes that are unanimous or almost so – to foster confidence among investors that it’s pursuing rate policies that command broad support. For several days stocks made big moves up and down as investors wondered if that would happen.
Investors are positioning for a rate increase at the end of the year. For the dovish members, the lack of reported inflation is the crucial element calling for rate increases to be delayed.
In futures today, the Dow is trading 57 higher; the S&P500 is up seven and the Nasdaq is over 20 points to the good.
BONDS, CURRENCIES: Bond prices fell.
United States stocks were also supported by the Bank of Japan’s surprise decision to adopt a “yield curve control” under which it will buy long-term government bonds to keep 10-year bond yields at current levels around zero per cent.
The 2017 estimate was raised to 1.8%, down from the previous forecast of 1.9%.
United States central bankers are expected to keep interest rates on hold Wednesday amid an uncertain USA economy and after the Bank of Japan unveiled a new effort to fight weak inflation. Inflation has remained stubbornly below that level for four years – a key factor in the Fed’s reluctance to resume raising interest rates.
The greenback slipped 0.1 per cent to 100.25 yen, having already weakened 1.4 per cent on Wednesday to touch a 3-1/2 week low of 100.34.
Barclays outperformed, rising 3.1 percent after HSBC analysts upgraded the bank to “buy” from “neutral”.
In setting rate targets for financial institutions’ excess cash deposits and 10-year government bonds, the BOJ looked set to exert unprecedented control over bond market rates to try to spark life into the world’s third-largest economy. Cooperman denied the charges.
BUYBACKS: Microsoft said it will buy back $40 billion in stock and also raised its quarterly dividend. Yields on 10-year government bonds briefly broke into positive territory on the news before falling back.
KB BEAT: KB Home added 34 cents, or 2.3 percent, to $15.27 after the homebuilder disclosed strong results. In June it forecast growth of 2%.
Wells Fargo shares rose 1.2 percent after the bank’s chief executive weathered criticism as he testified before a U.S. Senate panel.
The euro rose to $1.1180 from $1.1157.
Palladium rose 0.2 percent to $684.30.
The RBNZ’s blunt statement that further easing would be needed knocked the local dollar down half a USA cent to $0.7340 NZD=, but the market has found it hard to sell a currency that still offers an overnight interest rate of 2 percent.
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Germany’s DAX rose 0.4 percent and the FTSE 100 of Britain added 0.1 percent.
