The price of oil erased early losses Thursday as Janet Yellen indicated that she plans to keep her predecessor's economic stimulus in place pending further improvement in the U.S. economy.
Yellen testified Thursday to the Senate Banking Committee, which is considering her nomination to be the next chairman of the Federal Reserve, replacing Ben Bernanke. She said the U.S. economy has regained ground lost to Great Recession but still needs the Federal Reserve's support because unemployment remains too high at 7.3 percent. That support has encouraged investment in riskier assets such as stocks and oil.
Yellen's comments helped reverse sharp morning losses in oil, partly caused by a government report showing the eighth straight increase in the nation's supply of crude oil. Benchmark U.S. crude for December delivery slipped 12 cents to $93.76 a barrel on the New York Mercantile Exchange. Oil fell as low as $92.51 in the morning and rose as high as $94.43 in the afternoon.
The U.S. Nymex benchmark is down by about 8 percent over the past month. Traders say further declines are likely, as U.S. crude output keeps rising.
Data from the Energy Department showed that in October, for the first time since 1995, the U.S. produced more crude oil than it imported — 7.7 million barrels a day against 7.6 million barrels a day.
"This is a trend that is likely to continue next year — crude oil production looks set to grow to 8.9 million barrels per day by the end of 2014, while crude oil imports are expected to drop to 5.8 million barrels per day," said analysts at Commerzbank in Frankfurt in a note to clients.
Energy Department data for the week ended Nov. 8 showed that crude oil supplies rose by 2.6 million barrels. Analysts expected an increase of 1.8 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
At the pump, the nationwide average for a gallon of gas is $3.19, down 16 cents from a month ago and 25 cents cheaper than at this time last year.
Brent crude, the international benchmark, rose $1.42 to $108.54 a barrel on the ICE exchange in London. Besides the Yellen comments, Brent was boosted by protests and disruptions at refineries in Libya, a vital supplier to Europe.
In other energy futures trading on Nymex:
— Wholesale gasoline added 6 cents to $2.68 a gallon.
— Heating oil added 3 cents to $2.93 a gallon.
— Natural gas rose 4 cents to $3.61 per 1,000 cubic feet.