Oil Rises as Dollar Drop Bolsters Commodity Appeal as Investment

"Crude oil has a bid but the oil supply-demand growth story isn’t improving," Michael Corcelli, chief investment officer of hedge fund Alexander Alternative Capital LLC in Miami, said by phone. "The dollar is selling off, Treasury yields are up and equities are down. In this climate the commodity sector looks good."

Refiners in the U.S. typically slow operations during September to perform maintenance after the end of the summer peak driving season. Utilization rates last week decreased by the most since the week ended Jan. 16, according to the EIA.

Shoulder Season

"Yesterday’s data made it clear that the shoulder season has officially begun with the big drop in refinery activity," Phil Flynn, senior market analyst at the Price Futures Group in Chicago, said by phone. "We’re worried about the global economy and haven’t been getting a consistent message out of the Fed."

U.S. crude stockpiles dropped by 1.9 million barrels to 454 million. Supplies at Cushing, Oklahoma, the delivery point for the WTI contract, dropped to 54 million barrels, the least since March. U.S. crude output rose 19,000 barrels a day to 9.14 million last week, the first gain since July, EIA data showed.

--With assistance from Grant Smith in London.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net Susan Warren, Richard Stubbe