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Oil Rises With Weak Dollar, Still Set for Weekly Loss on Demand

English Español 简体中文 हिन्दी Português
These translations are done via Google Translate

By Saket Sundria and Alex Longley

(Bloomberg)Oil erased earlier losses as the dollar’s decline makes commodities more attractive, but crude was still headed for a weekly drop over demand concerns.Futures in New York rose 0.8% while the greenback gave up gains to trade 0.2% lower. The oil market is still struggling with a slow recovery in consumption while higher supply from OPEC and its allies is starting to kick in.
U.S. crude set to end run of weekly gains

Oil has got off to a weak start in September with many countries still fighting to contain the coronavirus. The market will be watching August non-farm payroll data due Friday for signs of improvement in the U.S. economy. At the same time, crude supply is likely to remain higher than expected as Iraq is struggling to meet its output commitments under the OPEC+ deal.

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“In WTI, the return of $40 probably helped attracted some short covering, potentially signaling range-bound trading in the low-$40s,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S. Prices have been supported by a stabilizing dollar and healthier U.S. jobless data earlier in the week ahead of payrolls later, he said.

  • West Texas Intermediate rose 32 cents to $41.69 a barrel as of 10:06 a.m. London time
  • Brent for November settlement gained 29 cents, or 0.7%, to $44.36
    • The contract is down 1.6% this week

The diesel market is also weighing on the overall demand outlook. The fuel’s premium to Brent, a key metric used to gauge the market’s strength, plunged to the lowest in at least nine years due to stuttering consumption and a glut of supply. Diesel, used to power heavy industry such as agriculture and mining, as well as cars and trucks, is an important marker of economic health.

Other oil-market news
  • China’s seaborne crude imports in August fell 5.4% from a month earlier to 10.9 million barrels a day, dropping from a record high, according to shipping data compiled by Bloomberg.
  • tanker loaded with 2 million barrels of Kuwaiti crude sailing toward India’s Paradip refinery caught fire Thursday morning off Sri Lanka’s coast, raising concerns about an oil spill

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