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Monday, August 15, 2022

Oil prices edge up as US supplies fall, dollar retreats

Oil prices edged up from six-year lows Wednesday as US oil supplies declined and the dollar retreated.

US benchmark West Texas Intermediate for September delivery rose 22 cents to $ 43.30 a barrel on the New York Mercantile Exchange. The US contract on Tuesday closed at the lowest level since March 2009.

European benchmark Brent oil for September delivery gained 48 cents to $ 49.66 a barrel in London.

“We’re back in positive territory, but overall the reaction is rather tepid,” said Kyle Cooper of IAF Advisors.

US oil inventories dipped 1.7 million barrels in the week ending August 7, with domestic production falling 70,000 barrels a day to about 9.4 million barrels a day, according to data released by the US Department of Energy.

Oil prices also received support from a retreat in the dollar Wednesday as China’s move to devalue its currency against the greenback sparked speculation the US Federal Reserve will move more slowly to hike interest rates.

A cheaper dollar lifts demand outside the US for crude oil, which is traded in the US currency on international markets.

The International Energy Agency predicted in its monthly report that global demand for oil would rise by 1.6 million barrels in 2015, the fastest level in five years.

Still the IEA gave a mixed read on the overall state of the market. US oil prices have fallen from more than $ 90 a barrel a year ago.

The IEA said a “sizeable surplus remains” the rule in the oil market, thanks to strong production from members of the Organization of Petroleum Exporting Countries.

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