Crude Edges Higher Amid Low-Volume Trading and Dollar's Decline
Meanwhile, OPEC and allies are currently restoring output target set in late 2016 after a period of cutting supplies excessively.
(Bloomberg) -- Crude closed at the highest in almost three weeks, largely influenced by moves in the U.S. currency.
Futures settled 0.2 percent higher in New York on Monday. Trading in benchmark American oil futures was almost 60 percent below normal, in part because of a U.K. holiday. Meanwhile, the fading greenback breathed life into commodities priced in dollars.
“London’s closed, you have an end-of-summer situation where liquidity is just really not there,” said Bob Yawger, director of futures division at Mizuho Securities USA LLC.
Crude has averaged about $67 a barrel this month as trade tensions between China and the U.S. threatened the economic growth that fuels energy demand. At the same time, American sanctions against Iran are expected to deflate crude outflows from OPEC’s No. 3 producer.
The Organization of Petroleum Exporting Countries and allied suppliers achieved 109 percent adherence to self-imposed supply caps in July, according to people familiar with the data. A key monitoring committee was said to have decided to engage in more consultations during the second week of September to discuss how supply increases will be shared out.
West Texas Intermediate crude for October delivery added 15 cents to settle at $68.87 a barrel on the New York Mercantile Exchange, the highest since Aug. 7.
Brent for October settlement rose 39 cents to end the session at $76.21 on the London-based ICE Futures Europe exchange, the highest since early July. The global benchmark crude traded at a $7.34 premium to WTI, the widest since June.
The Bloomberg Dollar Spot Index fell as much as 0.5 percent, declining for a second session.
In the U.S., refiners may curtail some crude purchases as the waning days of the summer driving season provide an opportunity to idle some equipment and plants for maintenance work.
“You have the end of gasoline season in very plain sight,” said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida. “It’s kind of difficult to be long crude in a period where demand is clearly going to slacken by a considerable amount.”
Oil-market news:
- Gasoline futures climbed 0.6 percent to settle at $2.0896 a gallon.
- U.S. President Donald Trump said the U.S. is signing a new trade accord with Mexico to replace the North American Free Trade Agreement and called on Canada to join the deal soon or risk being left out.
- Crude stockpiles at the closely watched storage complex in Cushing, Oklahoma, rose by an estimated 50,000 barrels last week, according to a forecast compiled by Bloomberg.
- Nationwide, American crude inventories probably fell 1.49 million barrels last week, according to the median estimate of analysts surveyed by Bloomberg.
--With assistance from Heesu Lee, Tsuyoshi Inajima and Paul Burkhardt.
To contact the reporter on this story: Jessica Summers in New York at jsummers24@bloomberg.net
To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net, Joe Carroll, Debarati Roy
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