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Oil futures traded higher Tuesday, kicking off September on a positive note with prices finding support as some economic data show signs of recovery, boosting prospects for energy demand.
Prices are “aided by broader economic sentiment,” said Robbie Fraser, senior commodity analyst at Schneider Electric, in a Tuesday note. “Relatively bullish Chinese manufacturing data has reinforced the view that East Asia continues to push closer to pre-COVID demand levels—a core component of any long-term oil price recovery.
In the U.S. Tuesday, the Institute for Supply Management said its manufacturing index rose to 56% in August, up a fourth month in a row, from 54.2% in July.
West Texas Intermediate crude for October delivery CL.1, +1.50% CLV20, +1.50% on the New York Mercantile Exchange rose 78 cents, or 1.8%, to $43.39 a barrel, while November Brent crude BRNX20, +1.65% BRN.1, +1.65%, the global benchmark, traded up by 90 cents, or 2%, at $46.18 a barrel on ICE Futures Europe.
Earlier weakness in the dollar had provided a lift to dollar-denominated oil prices, with the ICE U.S. Dollar Index DXY, -0.11%, a measure of the currency against a basket of six major rivals, touching 91.746, its lowest since 2018. The index, however, moved up in the wake of a better-than-expected U.S. manufacturing survey reading.
Oil futures lost ground Monday but WTI logged its fourth straight monthly rise and Brent rose for a fifth straight month.
In other energy trading Tuesday, October gasoline RBV20, +1.93% rose 2.1% to $1.23294 a gallon, while October heating oil HOV20, +2.08% was up 2.2% at $1.2443 a gallon.
October natural-gas futures NGV20, -2.62% fell 2.5% to $2.565 per million British thermal units.
Traders awaited weekly data on U.S. petroleum supplies due out late Tuesday from the American Petroleum Institute and early Wednesday from the Energy Information Administration.
On average, analysts forecast a 1.2 million-barrel fall in crude inventories for the week ended Aug. 28, according to survey conducted by S&P Global Platts. They also expect to see a weekly drop of 4.7 million barrel in gasoline supplies and a decline of 900,000 barrel in distillate stocks.
Meanwhile, energy production in the Gulf of Mexico region has seen some recovery following Hurricane Laura last week. The Bureau of Safety and Environmental Enforcement on Monday estimated that about 53.5% of the current oil production in the Gulf of Mexico has been shut in, along with around 41.3% of natural-gas output. Around the time Laura reached the Gulf Coast early Thursday, around 84% of oil output was shut in.
