Investing.com — futures fell to their lowest level in four months before rallying on Tuesday afternoon, ahead of the American Petroleum Institute’s weekly inventory report.
On the New York Mercantile Exchange, WTI crude for September delivery fell to $46.70 a barrel, its lowest level since March 24, before rebounding to peak above $48.40 a barrel on a chopping day of trading. Texas Long Sweet futures settled at 47.89, up 0.50 or 1.07% on the session to halt a five-day losing streak.
On the Intercontinental Exchange (ICE), brent crude for September delivery traded in a broad range between $52.30 and $54.08, before settling at 53.24, down 0.23 or 0.43% on the session. The spread between the international and U.S. domestic benchmarks of crude stood at 5.35, below Monday’s level of $6.08 at the close.
Energy traders could receive further indications on the global supply-demand balance on Tuesday after the close when the API releases its weekly report on U.S. crude stockpiles. A separate government report from the Energy Information Administration (EIA) on Wednesday could show that crude inventories fell mildly by 0.4 million barrels for the week that ended on July 24.
Last week, the EIA reported that U.S. crude stockpiles unexpectedly rose by 2.5 million barrels for the week ending on July 27, pushing inventory levels nationwide to 463.9 million, the highest level at this time of year in at least 80 years. Analysts expected a weekly draw of 2.2 million.
Industry observers are placing a close eye on U.S. crude prices to determine a level that could force domestic shale producers to issue broad lay-offs and curtail crude output. At its current level, WTI crude futures are approaching March’s yearly-low around $44 a barrel. The high fracking costs associated with shale production make it more profitable for the companies to ramp up production when crude prices are higher.
Start Free 7 Day Trial Now: Learn the Real Key to Crypto Trading and Start Printing Money Like a Machine...
U.S. crude output, however, remains near 9.55 million barrels per day, near its highest levels in more than 40 years. Crude futures are down roughly 40% since the Organization of Petroleum Exporting Countries strategic decision in November to keep its production ceiling above 30 million bpd.
Energy traders also await the release of the Federal Open Market Committee’s monetary policy statement on Wednesday upon the completion of their two-day July meeting. The statement could provide further hints on the timing of the Fed’s first interest rate hike in nearly a decade.
The , which measures the strength of the greenback versus a basket of six other major currencies, rose to an intraday high of 97.08 before falling back slightly to 96.81, up 0.19%.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
FREE 3-Part Video Series: Gain the Power and Control to your Financial Security for Yourself. Click Here to Get Instant Access to Podcasts, Books, Courses and Workshops on the making money leveraging Cryptocurrentcy on Top-Perfroming Blockchains.