DTN Oil

WASHINGTON (DTN) -- Nearest delivery oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled mostly lower Thursday, although all contracts moved off the intra-session lows after the U.S. dollar reversed lower amid pressure from the unexpected jump in weekly jobless claims last week, indicating the economy continues to struggle and fuel demand will remain muted.

The U.S. Dollar Index reversed Thursday afternoon, falling back 11% against the basket of foreign currencies below 93.000, offering some support to the oil complex.

The U.S. Department of Labor reported jobless claims for the week ended Aug. 15 at 1.106 million, above expectations after declining for two weeks in a row. Initial unemployment claims fell below 1 million for the first time since mid-March the week prior, spurring hopes that the domestic labor market may be finally improving. The jump in claims last week, however, is a worrisome sign for the battered economy. Over 23 million Americans remain unemployed and the resurgent virus continues to weigh on businesses that managed to re-open.

The Centers for Diseases Control reported Wednesday that the U.S. coronavirus case count rose by 46,500 from 39,318 the day prior while the increase in the number of deaths came in at 1,404 versus 1,172 the previous day.

The Federal Reserve said in its July meeting minutes released Wednesday that any rebound of the economy will ultimately depend on the path of the virus and measures taken to contain it.

The Organization of the Petroleum Exporting Countries released a demand scenario Thursday in which a stronger and more-prolonged second wave of infections hit Europe, the United States and Asia in the second half of the year. Under an alternative scenario, global demand is forecast to fall by 11.2 million barrels per day (bpd) in 2020, sending OECD commercial oil inventories in the fourth quarter to 233 million barrels (bbl) above the latest 5-year average, the report showed. The best-case scenario called for global oil demand in 2020 to fall by 9.1 million bpd, 100,000 bpd more than in its previous forecast, before rising by 7 million bpd in 2021.

OPEC+ pledged to reach full compliance with the ongoing 7.7 million bpd supply agreement by the end of September. The group pressed members such as Nigeria and Iraq to do more to meet their quotas after they exceeded them between May and July.

West Texas Intermediate futures for September delivery expired 35 cents lower at $42.58 a barrel and new-front month WTI October contract finished with an 18 cents premium. Spot-month international benchmark Brent crude declined 47 cents to settle at $44.90 bbl. ULSD September futures slipped 0.43 cents to $1.2467 gallon and front-month RBOB September contract edged up 0.60 cents to $1.2965 gallon.

Liubov Georges can be reached at liubov.georges@dtn

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