Forexpros – Crude oil futures were up on Thursday, bouncing off a seven-day low as the previous day’s sharp decline created bargain buying opportunities for investors, while concerns over a disruption to supplies and a weaker U.S. dollar lent support.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD97.72 a barrel during European morning trade, climbing 0.55%.
It earlier fell as much as 0.65% to trade at USD96.53 a barrel, the lowest price since July 19.
Crude oil futures sank nearly 1.9% on Wednesday as negotiations to raise the U.S. debt ceiling remained deadlocked and after government data showed that U.S. crude supplies rose unexpectedly last week.
However, the sharp decline triggered some bargain buying from traders reluctant to bet that prices would fall further as a storm approached the Gulf of Mexico, threatening to disrupt supply.
The U.S. National Hurricane Center said on Wednesday that Tropical Storm Don, the fourth storm of the Atlantic hurricane season and the first major Gulf of Mexico storm, was headed toward the Texas coast.
Oil majors Royal Dutch Shell and Anadarko Petroleum said they were evacuating workers primarily from western Gulf operations, while BHP Billiton and British Petroleum said they were evacuating support workers from central Gulf platforms.
Energy traders track tropical storm activity in the event it disrupts production in the Gulf of Mexico, which is home to 29% of U.S. oil production.
Weakness in the dollar had also contributed to oil’s strength. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.27% to trade at 74.08.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery rose 0.65% to trade at USD118.11 a barrel, up USD20.39 on its U.S. counterpart.
Forexpros
