Crude Rises On Lower Dollar, Supply/Demand Factors Uncertain

Oil prices rose around 1.5% on Tuesday, on the back of a lower greenback and a general improvement in risk appetite. They fell heading into the US data but then bounced on weaker US confidence and JOLTS data. The USD index finished 0.6% lower.

• Markets remain concerned about the demand outlook and supply going forward is uncertain with very low crude stocks and possible extension to Saudi production cuts but shipments from Russia and Iran are increasing. Hurricane Idalia is strengthening as it approaches Florida but Shell has said that it won’t be closing any offshore facilities.
• WTI rose 1.5% to close at $81.32/bbl and has started the APAC session slightly higher at $81.36. It fell to an intraday low of $79.34 before the US data and then bounced to a high of $81.41, approaching resistance at $81.75, August 21 high. It spent most of the European/NY session above $80.
• Brent increased 1.4% to $85.56/bbl. It fell to $83.80 before rising to a high of $85.65, just off resistance at $85.68. A break of resistance would open the bull trigger at $88.10, August 10 high.
• Bloomberg reported that API data showed a massive 11.5mn barrel US inventory drawdown in the latest week after -2.4mn, according to people familiar with the data. Distillate rose 2.5mn and gasoline +1.4mn. The official EIA data is out later today.