WTI Futures Edge Up as USD Slips, Equities Reverse Losses

Liubov Georges
By  Liubov Georges , DTN Energy Reporter

WASHINGTON (DTN) -- Nearby delivery month oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange followed equities higher in afternoon trade Thursday, finding support from renewed weakness in the U.S. dollar that faded from a two-month high 94.62 following a weaker-than-expected reading on weekly jobless claims and expected slowdown in durable goods orders during August set for release 8:30 a.m. ET Friday.

Following back-and-forth trade for most the session, NYMEX West Texas Intermediate futures for November delivery settled 38 cents higher at $40.31 per barrel (bbl) and international crude benchmark Brent November contract firmed on the session to $41.94 bbl. NYMEX October ULSD futures added 0.92 cents to $1.1167 gallon, and front-month RBOB futures advanced 1.44 cents to $1.1957 gallon.

U.S. initial jobless claims for the week-ended Sept. 19 unexpectedly rose to 870,000, bearish against calls for a modest improvement to 843,000. Continued claims -- the number of people collecting unemployment benefits for consecutive weeks -- also fell a less than expected 167,000 from the previous week's adjusted 12.580 million level. The latest jobs data is yet another indication the pace of recovery has stalled in the most recent weeks absent a new stimulus package that could reignite growth seen at the beginning of summer. Investment bank Goldman Sachs cut its outlook for fourth quarter economic growth to 3% from 6% in a prior forecast after changing its base case to include no new stimulus bill until 2021.

U.S. Treasury Secretary Steven Mnuchin told a Senate Banking Committee on Thursday he would resume stimulus talks with House Speaker Nancy Pelosi this month and that federal fiscal aid is still needed to "heal the economy." Wall Street Journal reported House Democrats prepared a new $2.4 trillion coronavirus aid proposal which included renewed Paycheck Protection Plan loan program to small businesses and assistance to airlines.

On Friday, markets will take a close look on durable goods orders for August to be released by U.S. Census Bureau, with a market consensus calling for orders placed with domestic manufactures to slow to 1.5% from an 11.7% jump in the previous month. This coincides with protracted weakness in industrial production in August, with the growth rate at a mere 0.4% versus an expected 1% expansion.

Liubov Georges can be reached at liubov.georges@dtn.com

Liubov Georges