Oil closes higher, with dollar and decline in strategic reserves in the US

After falling more than 8% last week, oil futures contracts rose on Monday (8). In addition to the adjustment, the commodity’s advance was supported by the weakened dollar against rivals.

Data on strategic oil reserves at the lowest level in the United States since 1985 was also on the radar.

On the New York Mercantile Exchange (Nymex), a barrel of WTI oil for September closed up 1.97% ($1.75) at $90.76.

While Brent’s for the following month rose 1.82% ($1.73) to $96.65 on the Intercontinental Exchange (ICE).

Oil fluctuated in the session but managed to end the day on the positive. Awaiting the consumer inflation data (CPI, its acronym in English) from the United States, on Wednesday, the dollar fell against its peers, which favors the purchase of commodities for holders of other currencies.

“Crude oil struggled overnight,” says Mizuho managing director Bob Yawger.

He said speculators were “jumping on the bandwagon” that the $370 billion in climate action, passed in the Senate over the weekend, will help dwindle oil inventories, adding that it is “quite ironic considering the legislation is largely intended to replace fossil fuels.”

Also, the Department of Energy (DoE) reported that the US Strategic Oil Reserve fell by 5.3 million barrels in the last week, the lowest level in 37 years.

Held in deep underground caverns off the coasts of Texas and Louisiana, the reserve has dropped more than 130 million barrels since the administration of President Joe Biden began sales.

As for Russian oil sanctions, Germany is expected to maintain the deterrents despite the energy crisis, according to a spokesperson. The information is from Reuters.

*With information from Dow Jones Newswires