Brent oil struggled to reach over $53 per barrel. However, further drops in U.S. oil inventories and slowing pace in the U.S. oil-rig count along with a relatively weaker U.S. dollar index give a slight support to the prices. The crude oil production in U.S. continued to rise despite the recent tropical Harvey hurricane around Texas, which negavitely effected major oil production fields and refineries, therefore such a rise would not help prices upward.
Oil markets for the last week would be reviewed on the U.S. dollar index, weekly American Petroleum Institute (API) and Energy Information Administration (EIA) oil inventories, weekly EIA field curude oil production in the U.S. and the weekly U.S. Baker Hughes rig count.
Brent oil prices started the week with a drop to $51.89 due to diminishing oil demand impacted by some offline refineries damaged by Harvey, despite the decline as reported in the U.S. Baker Hughes data from the previous week and the decrease in the U.S. dollar index. On Tuesday, the price increased to around $52.00 through a weekly fall of 5.78 million barrels in U.S. oil inventories as detailed in the weekly API report, despite the slight rise in the U.S. dollar index.
However, it sharply declined to $50.86 on Wednesday due to sharp increase in the U.S. dollar index and the rise in U.S. crude oil production of 2 thousand barrels per day to 9.3 million barrels per day for the week ending Aug. 25, as reported by the U.S.’ weekly EIA crude oil production report. This decline was despite a fall of 5.39 million barrels in U.S. commercial oil inventories, according to the Energy Information Administration’s (EIA) weekly report.
However, it surged to $52.38 impacted by continuous drop in U.S. oil stockpiles and a decline in U.S. dollar index on Thursday.
Brent oil price continued its ascent settled at $52.75 at the end of the week with no change in the weekly U.S. oilrig count as per Baker Hughes data and in spite of a slight rise in the U.S. dollar index.
In brief, last week Brent oil slightly increased to $52.75 from $52.41 mainly due to further drops in U.S crude oil inventories.
U.S. dollar index keep remaining weaker due to not only lately political disputes over Trump and Fed’s dovish statements but also geopolitical risks. Recent North Korea threats in Far East and U.S. retorts to it get money traders to buy gold or more reliable currencies like Swiss Franc. Therefore, U.S dollar index is becoming weaker, which supports oil prices.
Harvey storm resulted in decreasing in oil prices due to low demand in refineries devastated by the storm. However, storm ended and refineries now are recuperating. Therefore, oil demand would rise and accordingly oil prices would increase. However, possible rise in U.S. crude oil production after the storm could limit such price increases.
This week, the Brent oil price would reach over $55 through if further slumps in U.S. oil inventories and declines in U.S crude oil production occur, amid weaker U.S. dollar index.
- Opinions expressed in this piece are the author’s own and do not necessarily reflect Anadolu Agency's editorial policy.