Crude Sinks as Dollar Rebounds on Trump's Trade War Enthusiasm
Oil trades near $68 on bigger-than-forecast U.S. inventory draw.
(Bloomberg) -- Crude edged lower as the dollar strengthened, diminishing the appeal of commodities priced in the currency.
Futures closed down 3 cents in New York on Thursday, capping a five-day rally. The greenback gained, halting the longest slide in six months, after U.S. President Donald Trump praised the trade war with China as a boon to some American industries and signaled he’s committed to seeing the dispute through.
“If there is anything that is influencing the market here at the moment, it seems to be a reverse correlation to the dollar,” Bob Yawger, director of futures division at Mizuho Securities USA LLC, said. “That seems to be the theme of the day here so far.”
Crude has fallen this month as the trade dispute between the world’s largest economies threatened demand growth. Even so, JBC Energy said global oil demand is poised for a recovery after a weak second quarter.
West Texas Intermediate crude for October delivery dipped 3 cents to settle at $67.83 a barrel on the New York Mercantile Exchange. Total volume traded was about 39 percent below the 100-day average.
Brent for October settlement slipped 5 cents to end the session at $74.73 on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $6.90 premium to WTI.
The Bloomberg Dollar Spot Index rose as much as 0.8 percent. The slump of the previous five sessions was the longest such stretch since February.
Meanwhile, U.S. crude stockpiles plunged by 5.84 million barrels last week, according to data released Wednesday. That followed a 6.81-million increase the prior week.
Other oil-market news:
- Gasoline futures fell 0.4 percent to settle at $2.0592 a gallon.
- Saudi Arabia has formally put the initial public offering of its giant oil company on hold while Aramco focuses on buying a strategic stake in local petrochemical group Sabic for as much as $70 billion.
- OPEC shipments of crude are expected to drop by 60,000 barrels a day in the four weeks to Sept. 8, according to tanker-tracker Oil Movements.
- Analysts and traders are neutral on WTI crude futures, a Bloomberg survey shows.
--With assistance from Sharon Cho, Tsuyoshi Inajima and Grant Smith.
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, Carlos Caminada
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