Oil Rises as Dollar Drop Bolsters Commodity Appeal as Investment
(Bloomberg) -- Oil climbed from the lowest level in more than a week as the dollar dropped, bolstering demand for commodities as an investment.
West Texas Intermediate gained for the first time in three days as the U.S. currency fell against its peers. Gold climbed to a four-week high as orders for business equipment stalled in the U.S., boosting speculation that the Federal Reserve will hold off on raising interest rates until next year. Prices slipped earlier after government data Wednesday showed that U.S. refinery utilization slid 2.2 percentage points last week.
Oil prices are down more than 25 percent from this year’s closing peak in June on speculation a global glut will be prolonged. Confusion over the Federal Reserve’s stimulus policy and concern that China’s economic slowdown will spread are weighing on the market. While U.S. crude stockpiles declined for a second week through Sept. 18, they remain almost 100 million barrels above the five-year seasonal average.
"The dollar is getting hit, which is helping oil, gold and other commodities," Kyle Cooper, director of research with IAF Advisors and Cypress Energy Capital Management in Houston, said in an interview.
WTI for November delivery rose 43 cents, or 1 percent, to end at $44.91 a barrel on the New York Mercantile Exchange. The contract touched $43.71, the lowest intraday level since Sept. 14. The volume of all futures traded was 9 percent below the 100-day average.
Brent for November settlement advanced 42 cents to $48.17 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude closed at a $3.26 premium to WTI.
The Bloomberg Dollar Spot Index declined 0.4 percent, down for the first time in five days.
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