0213 GMT: Crude oil futures were higher in mid-morning trade on Sept. 1 as a weaker dollar and robust Chinese economic data lifted the global crude complex despite the rising coronavirus case count in major economies weighing on market sentiment.
At 10:13 am Singapore time (0213 GMT), the front-month ICE Brent November crude futures were up 39 cents/b (0.86%) from the Aug. 31 settle at $45.67/b, while the NYMEX October light sweet crude contract was 32 cents/b (0.75%) higher at $42.93/b.
"There's not much happening on the fundamentals front in the oil market, until the weekly US data comes back into focus," Vandana Hari, founder and CEO of oil consultancy firm, Vanda Insights, told S&P Global Platts on Sept. 1.
"The default position for crude appears to be responding to the dollar's move, which continues to be downhill," Hari added.
At 10:13 am (0213 GMT), the US dollar index stood at 91.940, down 0.21% from 92.18 at the close.
The weakness in the dollar is pushing the currency to a more than two-year low and a fourth straight month of losses, according to analyst reports. Due to the strong inverse correlation between the dollar and crude prices, a dollar helps to provide support for the global crude complex, which has been a significant backstop in the past few weeks.
"[However], now that the Caixin survey is out and shows Chinese manufacturing expanding at the fastest pace in 10 years in August, crude is likely to get another modest boost," Hari added.
The Caixin/Markit manufacturing Purchasing Manager's Index, or PMI, came in at 53.1 for August, compared with 52.8 in July and higher than market expectations of 52.7, according to media reports.
This comes a day after official manufacturing PMI for the month of August came in at 51.0, according to data released by the National Bureau of Statistics of China on Aug. 31.
PMI readings above 50 indicate expansion while those below signal contraction.
However, rising coronavirus, or COVID-19, case counts worldwide, continued to dampen market sentiments on the prospect for a full recovery in energy demand.
Global COVID-19 infections stand at 25.40 million, with US recording more than 6 million infections and Brazil and India approaching the 4 million mark, latest data from John Hopkins University showed.
Meanwhile, US commercial crude inventories are expected to fall by 1.2 million barrels to 506.6 million barrels for the week ended Aug. 28, on the back of reopening economic activity and stronger US crude exports, an S&P Global Platts analysis on Aug. 31 showed. Notably, it will be the sixth consecutive dip in crude draws and the longest stretch of declines in a year.
Gasoline stocks are also expected to fall by 4.7 million barrels to about 234.5 million barrels while distillate inventories decline by about 900,000 barrels to 178.3 million barrels.
Market participants will look to fresh cues from the inventory reports by the American Petroleum Institute and the US Energy Information Administration on Sept. 1 and 2, respectively.
