WASHINGTON (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Intercontinental Exchange Brent moved marginally higher in overnight trade, gaining on the reports of an oil field attack in Saudi Arabia, while a strengthening dollar and demand related concerns continue to limit the upside.
Near 9 a.m. ET, September NYMEX West Texas Intermediate traded 52 cents higher at $55.39 per barrel (bbl) while October ICE Brent crude added 50 cents to $59.14 bbl.
September RBOB futures added 0.51 cents to $1.6619 gallon and the spot month ULSD contract gained 0.62 cents to $1.8190 gallon.
Crude oil pushed higher after Yemen's Houthi rebels struck Saudi Arabia's Shaybah oilfield this weekend, escalating tensions between Iran and its regional rivals in the Middle East. A Houthi military spokesman said on Saturday that the group targeted the Shaybah oil field with 10 drones in the "biggest attack in the depths" of the kingdom, while also vowing "fiercer and larger attacks" against Saudi facilities in the coming weeks. Shaybah oilfield produces nearly 1 million bpd and is located roughly 700 miles from the border with Houthi-controlled Yemen. According to Saudi Aramco's statement, the drone attack caused a limited fire at the facility, but did not disrupt production. Still, the incident is the latest in a series to affect energy infrastructure in the Middle East.
Meanwhile, the Organization of the Petroleum Exporting Countries in its latest monthly report on Friday detailed a 10th straight monthly decline in the group's output in July, which fell 8.2% to 29.61 million barrels per day (bpd), a better than five year low.
Also in the report, OPEC cut its forecast for oil consumption by 40,000 bpd to 1.1 million bpd for the current year while also indicating an oversupplied market in 2020. Paris-based International Energy Agency and the U.S. Energy Information Administration have also both lowered their demand forecasts for 2019 and 2020, respectively.
"While the outlook for market fundamentals seems somewhat bearish for the rest of the year, given softening economic growth, ongoing global trade issues and slowing oil demand growth, it remains critical to closely monitor the supply/demand balance to assist market stability in the months ahead," OPEC said its latest report.
U.S. dollar strengthened 0.7% in overnight index trading to 98.080, 2-1/2 weeks high.
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