Crude Prices Jump 3% On Gasoline Rally, Weak Dollar
NEW YORK, April 26 (Reuters) - Crude oil prices rose about 3 percent on Tuesday on the back of a rally in the gasoline market and as a tumbling dollar boosted commodities denominated in the greenback after bets the Federal Reserve will hold U.S. interest rates where they are.
U.S. gasoline futures rallied more than 3 percent to their highest since August on Tuesday, boosting refinery margins <1RBc1-CLc1>, after a series of Gulf Coast refinery unit outages, buying from Venezuela and a reported drop in New York inventories.
"I think the market has become more optimistic on oil products," said Scott Shelton, broker and commodities specialist with ICAP in Durham, North California. "If refining margins stay strong, crude runs will be quite high and that will make the odds of a crude stock draws increase significantly."
Analysts polled by Reuters expect the U.S. government to announce on Wednesday that crude stocks rose 2.4 million barrels last week while distillate and gasoline stockpiles fell. Industry group American Petroleum Institute will issue preliminary inventory at 4:30 p.m. EDT (2030 GMT).
Crude futures rose from early in the session as the dollar fell for a second straight day ahead of Wednesday's Fed policy statement. The dollar rallied earlier this year, weighing on oil, as investors braced for possible interest rate hikes from the Fed's Federal Open Market Committee (FOMC).
Brent crude futures finished up $1.26, or 2.8 percent, at $45.74 a barrel.
U.S. crude futures settled up $1.40, or 3.3 percent, at $44.04.
Oil prices are headed for a fourth straight week of gains, with Brent on track to finish April nearly 16 percent higher for its best monthly gain in a year, despite aborted plans by major producers to agree on an output freeze at a meeting in Qatar earlier this month.
"For now, the line of least price resistance remains to the upside and we will be reassessing this view in light of tomorrow's FOMC statement," said Jim Ritterbusch of Chicago-based oil market consultancy Ritterbusch & Associates.
Still, analysts warned of possible price wars and excessive supply ahead.
Citigroup said Saudi Arabia could target 500,000 barrels per day in new sales that would bring its output to at least 11 million bpd in a tussle with Iran for market share.
"If anyone had a doubt about Saudi Aramco's ability to use its logistical system and spot sales to increase market share, its recent 730,000-barrel sale of a cargo to a Chinese teapot refiner in Shandong should lay any doubts to rest," Citi said in a note to clients.
(Additional reporting by Amanda Cooper in LONDON and Henning Gloystein in SINGAPORE; Editing by David Gregorio and Marguerita Choy)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- USA Driving Activity to Increase to All-Time Highs
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- I Squared Eyes Full Ownership of Europe Gas Storage Firm
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension