U.S. crude futures fell on Wednesday, weighed down by the dollar's strength after already
being pressured by industry inventory data that showed a big crude oil stockpile rise.
"Bernanke's speech gave the dollar a boost and that certainly was the number one factor that pulled back crude futures," said Phil Flynn, analyst at PFGBest Research in Chicago.
"Before crude fell sharply, the energy markets were waffling on the bearish API numbers, which in any case was tempered by a drawdown at the NYMEX delivery hub in Oklahoma, and talk about the potential Greece bailout," Flynn added.
The U.S. dollar extended gains against the euro after Federal Reserve Chairman Ben Bernanke said he could begin pulling back stimulus from the economy by first removing cash
from the financial system.
The dollar also rose against the currency basket. U.S. stocks fell after the Bernanke comments.
The industry group American Petroleum Institute's inventory report on Tuesday showed crude oil stockpiles rose much more than expected last week, despite import and run drops.
Distillate stocks fell and gasoline stocks rose. The U.S. Energy Information Administration has delayed its oil inventory and natural gas storage reports until Friday because of the snow storms in Washington.
A Reuters survey of analysts yielded a forecast for crude inventories to be up 1.5 million barrels last week, distillate stocks down 1.9 million barrels and gasoline supplies up 500,000 barrels.
A weak economy and higher oil prices are expected to keep the EIA from increasing its U.S. oil demand estimate in its monthly forecast due on Wednesday at noon EST.
