UPDATE 9-Oil prices hit 5-month high as U.S. crude stockpiles, dollar fall

UPDATE 9-Oil prices hit 5-month high as U.S. crude stockpiles, dollar fall

Reuters  | Aug 06, 2020 07:30

UPDATE 9-Oil prices hit 5-month high as U.S. crude stockpiles, dollar fall

* U.S. crude stockpiles fall sharply, products build -EIA

* Weaker dollar supports oil prices

* Euro zone July business activity returns to modest growth

* Global coronavirus deaths top 700,000 - Reuters tally (Adds settlement figures)

By Devika Krishna Kumar

NEW YORK, Aug 5 (Reuters) - Oil prices rose to their highest since early March on Wednesday after U.S. crude inventories fell sharply and the dollar weakened, but mounting coronavirus infections had investors worried about the demand outlook.

Brent crude LCOc1 ended the session up 74 cents, or 1.7%, at $45.17 a barrel, while West Texas Intermediate CLc1 oil settled 49 cents, or 1.2% higher, at $42.19 a barrel.

Both contracts gained over 4% earlier in the session.

U.S. crude inventories fell by 7.4 million barrels last week, the Energy Information Administration said. That exceeded the draw of 3 million barrels analysts predicted in a Reuters poll. EIA/S

A weaker dollar .DXY , which makes oil cheaper for holders of foreign currencies, also supported prices. /USD

"There's no escaping the benefits of a weaker dollar in the commodity space and oil is certainly basking in its decline," senior OANDA analyst Craig Erlam said.

Oil also drew support from signs that talks between the White House and Democrats in Congress on a new coronavirus relief package are making progress, although the sides remain far apart. factory data this week also showed an improvement in orders, which some analysts took as a hint of economic recovery. zone business activity returned to modest growth in July as some curbs imposed to stop the spread of the coronavirus eased, the Composite Purchasing Managers' Index from IHS Markit showed. prices come against the backdrop of a surge in coronavirus cases which could threaten a recovery in fuel demand.

Global coronavirus deaths surpassed 700,000 on Wednesday, according to a Reuters tally, with the United States, Brazil, India and Mexico leading the rise in fatalities. see gasoline demand coming in close to 7% year-on-year lower through Q3, with gasoil/diesel registering a decline of some 4%, implying a continued slowdown of the recovery, with a global return to 2019 levels this year increasingly in doubt," JBC Energy said, referring to global consumption, which has collapsed due to lockdowns to help contain the pandemic.

The consultancy sees jet fuel demand down 50% year on year through the third quarter.

In the United States, the world's top oil consumer, distillate inventories rose last week to their highest in 38 years for the third week in a row, while Gulf Coast distillates were at record high levels, the EIA said. Gasoline stocks rose for a second straight week.

"As we approach the end of the driving season and enter into the fall heating oil season, refining margins are going to remain under pressure as gasoline and distillate inventories remain substantially above last year and we have been unable to cut into that overhang in a meaningful way," said Andrew Lipow, president of Lipow Oil Associates in Houston.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ CHART: U.S. oil may retest resistance at $42.08

CHART: Brent oil may retreat to $43.81 before rising

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Canada) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the Investing.com App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.

Investing.com is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.