Crude Futures Rise on Weaker Dollar and Expectations for Higher Oil Demand

Strategic Insights -

Oil futures shot higher Wednesday as investors bet on a global economic recovery, making oil and other commodities more attractive than the weakening dollar. Crude futures rose 51 cents, or 0.7%, to $71.61 a barrel on the New York Mercantile Exchange, with Brent crude trading 79 cents higher at $70.21 a barrel on the ICE futures exchange. The Organization of Petroleum Exporting Countries (OPEC) is expected to keep production quotas unchanged, despite the dollar's big move. Analysts see oil inventories falling in the U.S., with an average forecast for a drop of 1.3 million barrels in the week ended Sept. 4.

Key Takeaways:

  • Crude futures rose 51 cents, or 0.7%, to $71.61 a barrel on the New York Mercantile Exchange.
  • Brent crude traded 79 cents higher at $70.21 a barrel on the ICE futures exchange.
  • The Organization of Petroleum Exporting Countries (OPEC) is expected to keep production quotas unchanged.
  • Analysts see oil inventories falling in the U.S., with an average forecast for a drop of 1.3 million barrels in the week ended Sept. 4.
  • Oil traders largely hold the same opinion, keeping prices above $70 a barrel on the prospect that an economic recovery will soon bring a surge in demand.
  • The International Energy Agency is expected to provide more support for the optimistic take on future demand with its monthly oil report on Thursday.
  • The IEA is seen increasing its oil demand forecast.
  • The U.S. Department of Energy is scheduled to put out its monthly outlook later Wednesday.
  • Front-month October reformulated gasoline blendstock, or RBOB, traded 73 points, or 0.4%, higher at $1.8362 a gallon.
  • October heating oil traded 85 points, or 0.5%, higher at 41.7910 a gallon.

Statistics:

  • Crude futures rose 51 cents, or 0.7%, to $71.61 a barrel.
  • Brent crude traded 79 cents higher at $70.21 a barrel.
  • Oil inventories are expected to fall in the U.S., with an average forecast for a drop of 1.3 million barrels.
  • OPEC produces around 40% of the world's oil.

Sources:

  • Dow Jones Commodities News via Comtex
  • Brian Baskin, Dow Jones Newswires
  • Summer Said in Dubai, Dow Jones Newswires
  • Tradition Energy in Stamford, Conn.