Oil futures rose early Thursday, with bulls looking to snap a three-day losing streak tied to worries about demand from China, rising Treasury yields and a stronger U.S. dollar.
Price action
-
West Texas Intermediate crude for September delivery
CL00,
+0.96%CLU23,
+0.96%
rose 65 cents, or 0.8%, to $80.03 a barrel on the New York Mercantile Exchange. -
October Brent crude
BRN00,
+0.98%BRNV23,
+0.98%,
the global benchmark, was up 71 cents, or 0.9%, at $84.16 a barrel on ICE Futures Europe.
Market drivers
Crude was attempting to find its footing after pulling back in the wake of a run of seven straight weekly gains, which took WTI to a 2023 high last week. Weak Chinese economic data and growing worries over the country’s property sector are stoking worries about demand from the world’s second-largest consumer of crude.
Meanwhile, hot U.S. economic data has sent Treasury yields soaring, with the 10-year rate hitting its highest since 2008. In turn, the U.S. dollar has also rallied, with the ICE U.S. Dollar Index
DXY
rising nearly 1% over the last five days before pulling back Thursday.
A stronger dollar can be a negative for commodities priced in the unit, making them more expensive to users of other currencies.
“Oil traders are getting that sinking feeling as rates and carry pressure builds again as the oil market sniffs out demand fears against the backdrop of the Fed that may have little alternative to turn up the Fed Funds screws to throw a wet blanket over the red hot U.S. economy,” Stephen Innes, managing partner at SPI Asset Management, said in a note.
The Energy Information Administration will release weekly natural-gas storage data Thursday morning. Analysts surveyed by S&P Global Commodity Insights, on average, expect the data to show a 35-billion cubic foot (Bcf) injection for the week ending Aug. 11.
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