Investing.com — Crude futures rebounded on Monday after touching down to six-year lows in overnight trading, amid a weaker dollar and a Midwest refinery shutdown that enabled gasoline futures to enjoy its highest one-day move in more than a month.
On the New York Mercantile Exchange, WTI crude for September delivery traded in a tight range between $43.39 and $45.01 a barrel, before settling at 44.94, up 1.07 or 2.50% for the session. It marked the strongest one-day move in futures in more than two months. Texas Long Sweet futures are coming off one of their worst three-week stretches in a period of several years, after plunging more than 13% since July 20.
On the Intercontinental Exchange (ICE), brent crude for September delivery wavered between $48.90 and $51.09 a barrel, before closing at $51.03 up 1.78 or 3.61% on the day. The spread between the international and U.S. domestic benchmarks of crude stood at $6.09, above Friday’s level of $5.37 at the close.
Earlier, both WTI and brent futures dipped to their lowest levels since March 2009, amid ongoing concerns over a glut of oversupply on the global markets. Last week, Saudi Arabia said it increased production by 70,000 barrels per day in July 10 10.57 million bpd, fueling concerns that the kingdom could average 11 million bpd for the second half of the year.
Gasoline futures shot up by 4% on Monday, two days after a crude distillation unit at BP (LONDON:) Plc’s was shut down at the company’s Whiting, Indiana refinery, sources told Reuters. Production within the 240,000 bpd unit, also known as Pipestill 12, was halted on Saturday following a malfunction. Refineries are in the midst of one of their busiest periods of the year during the Summer driving season.
The crack spread, an indicator of the short-term profit margin of oil refineries, reached a one-week high for gasoline on Monday. The spread compares the cost of oil inputs to the wholesaler with the spot prices of its outputs.
Energy traders also reacted to continuing builds in U.S. oil rigs from late last week, after oil services firm Baker Hughes (NYSE:) said its weekly rig count for the week that ended on July 31 increased by six to 670. It marked the third consecutive week of such increases. The count among U.S. oil rigs is still down approximately 60% from its high last October when it peaked above 1,600.
The , which measures the strength of the greenback versus a basket of six other major currencies, fell 0.46% to an intraday low of 97.21 in U.S. afternoon trading. Last week, the index soared to a four-month high above 98.40.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.
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