Crude prices turn back lower after U.S. data
LONDON, August 17, 2017 – Oil prices turned lower after a brief rebound on Thursday, to trade at a more than three-week trough after strong U.S. data boosted demand for the greenback and as concerns over rising U.S. production continued to weigh.
The U.S. West Texas Intermediate crude September contract was at $46.61 a barrel by 9:00AM ET (1300GMT), down 19 cents, or around 0.41%, at its lowest level since July 25.
Elsewhere, Brent oil for October delivery on the ICE Futures Exchange in London lost 15 cents, or about 0.3%, to $50.12 a barrel, not far from a three-week low of $50.02 hit on Tuesday.
The U.S. dollar strengthened broadly after data showed that the number of people who filed for unemployment assistance in the U.S. last week fell more than expected.
A separate report showed that manufacturing activity in the Philadelphia region declined less than expected this month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.50% at 93.87, close to the previous session’s nearly three-week high of 94.06.
Oil ended more than 1% lower on Wednesday after U.S. government data revealed a weekly climb in domestic production to the highest level in over two years.
Data from the U.S. Energy Information Administration showed that total domestic crude production edged up by 79,000 barrels a day to 9.5 million barrels a day last week, its highest level since July 2015.
Crude oil inventories fell by 8.9 million barrels, according to the EIA figures, the seventh weekly decline in a row.
Oil prices have been under pressure in recent weeks as concern over rising U.S. shale output canceled out production cuts by OPEC and non-OPEC members.
OPEC and 10 producers outside the cartel, including Russia, agreed since the start of the year to slash 1.8 million barrels per day in supply until March 2018 in order to reduce a global supply glut and rebalance the market.
However, so far, the deal has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, as well as a relentless increase in U.S. shale output.
Elsewhere on Nymex, gasoline futures for September fell by 0.2 cents or 1.34%, to $1.543 a gallon, while September heating oil lost 0.2 cents, or 1.32%, to $1.555 a gallon.
Natural gas futures for September delivery eased 0.03%, to $2.888 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day.