MTECHTIPS Oil falls on inventories data, Bernanke comments

MTECHTIPS:-Oil falls on inventories data, Bernanke comments

Oil futures traded lower during Thursday’s Asian session as traders focused more on inventories data and comments from Federal Reserve Chairman Ben Bernanke than some decent housing data out of the U.S. On the New York Mercantile Exchange, light, sweet crude futures for July delivery fell 0.33% to USD93.97 per barrel. In U.S. economic news, the National Association of Realtors said existing home sales rose 0.6% last month to an annual rate of 4.97 million units, the highest level since November 2009.However, that data point went largely ignored by oil traders after the U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 338,000 barrels in the week ended May 17, compared to expectations for a decline of 778,000 barrels. Total U.S. crude oil inventories stood at 394.6 million barrels as of last week. The report also showed that total motor gasoline inventories increased by 3.02 million barrels, well above expectations for an increase of 22,000 barrels, which sent crude prices falling on fears less Americans may be traveling this summer. Also on Wednesday, Bernanke said the Fed’s USD85 billion per month bond-buying program, also known as the third version of quantitative easing, will stay in place for now. That is what financial markets wanted to hear, but the Fed chairman threw a curve ball by saying QE could taper off if conditions in the world’s largest economy improve. In prepared testimony in Congress earlier, Bernanke said ultra-loose monetary policy was providing "significant benefits" to the economic recovery and reiterated that the bank’s asset-purchasing program will remain in place for now.