Crude prices remain at 3-week lows after U.S. data

LONDON, August 15, 2017 – Oil prices remained at three-week lows on Tuesday, as the U.S. dollar continued to strengthen after the release of upbeat U.S. data and as concerns over a global supply glut continued to weigh.

U.S. West Texas Intermediate crude futures were down 37 cents or around 0.78% to $47.22 a barrel by 9.00 a.m. ET (1:00 p.m. GMT), from its last settlement.

U.S. crude settled down $1.23 or 2.5% at $47.59 a barrel on Monday, its biggest one-day loss in over a month and the lowest close since July 24.

International benchmark Brent crude futures were down 50 cents or 0.99% to $50.23 a barrel on the ICE Futures Exchange in London. The contract lost 2.9%, to close at $50.59 a barrel on Monday.

Concerns over slowing demand from China, the world’s second-largest oil consumer, pressured prices lower.

A report on Monday pointed to a drop in crude demand from Chinese refiners in July.

 

The stronger dollar also weighed on prices after data on Monday showed that U.S. retail sales rose at a faster than expected rate in July, brightening the outlook for economic growth in the third quarter.

A separate report showed that the Empire State manufacturing index climbed to 25.20 in August from 9.80 the previous month, blowing past expectations for a reading of 10.00. It was the highest level since September 2014.

The U.S. dollar index, which measures the greenback’s strength against a trade- weighted basket of six major currencies, was up 0.74% at 94.03, the highest since July 26.

Oil prices remain vulnerable to bearish sentiment, with traders assessing supply and demand figures to determine how close the oil market is to rebalancing.

The American Petroleum Institute was to release its latest U.S. inventories report later Tuesday, ahead of official storage figures from the U.S. Energy Information Administration on Wednesday.

A steady decline in U.S. crude inventories over the past two months has helped to support prices.

But doubts remain over how effective production cuts by the Organization of the Petroleum Exporting Countries will be at reducing the global supply glut.

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