Crude prices edged higher July 27 as a weakened US dollar offset renewed demand growth concerns.
NYMEX September WTI settled up 31 cents at $41.60/b, and ICE September Brent was up 7 cents on the day at $43.41/b.
The US dollar was on pace to decline for a seventh straight session July 27 as the market waited for Congressional Republicans to announce a new round of federal stimulus spending expected to total around $1 trillion. Front-month ICE US dollar index futures fell to around 93.66 in afternoon trading, on pace for the lowest close since September 2018. Oil prices and dollar strength are typically inversely correlated.
The GOP stimulus plan, details of which were released after the close of trading July 27, includes a second round of direct payments to US citizens, however it scales back federally funded unemployment assistance. A $600 weekly unemployment stipend expired over the weekend.
The government spending, while adding pressure on US dollar strength, is likely to boost consumer spending and at a time when oil recovery outlooks appear to have stalled.
Flight tracking data provider by flightradar24 shows the seven-day moving average of total flights has trended lower since July 19, the longest down stretch since global flight traffic bottomed in mid-April.
Total product supplied for gasoline, a proxy for end user demand, has declined in the wake of the July 4 Independence Day holiday and was nearly 12% behind year-ago levels in the week ended July 17, according to US Energy Information Administration data.
NYMEX August ULSD settled 22 points lower at $1.2541/gal, and August RBOB was down 1.01 cents at $1.2747/gal.
WTI forward structure weakened amid uncertain demand outlooks. The contango in the front-to-sixth month NYEMX WTI contract opened to 97 cents/b, the widest since June 16.
US crude stocks likely draw amid export surge
US commercial crude stocks are expected to have fallen 1.2 million barrels to around 535.4 million barrels during the week ended July 24, analysts surveyed by S&P Global Platts said.
The draw comes as crude exports surged to 3.89 million b/d last week, according to data from cFlow, Platts trade-flow software. The cFlow figure marks a nearly 1 million b/d jump from an EIA-reported 2.99 million b/d during the week ended July 17.
Weekly US crude exports have risen above 3 million b/d just twice since late May as the market worked through a glut of crude in floating storage built up during the spring. But as the COVID-19 pandemic recedes in some regions global crude demand has begun to clear the backlog of crude on the water, possibly offering some support to exports going forward.
The amount of oil on idle tankers fell 20 million barrels last week to 344 million barrels, according to S&P Global Platts Analytics data, on pace for the first monthly decline February.
