On the New York Mercantile Exchange, light, sweet crude futures for delivery in October CLV6, +0.51% rose 7 cents, or 0.2%, to $43.22 a barrel. Both benchmarks had declined for the past four consecutive days.
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Additionally, more US supply will return to the market as some producers in eastern parts of the Gulf of Mexico restart offshore operations as Hurricane Hermine made landfall in Florida and weakened into a tropical storm.
Oil had, however, entered a bull market last month – a 20 per cent rise from recent lows – on hopes that Russian Federation and Opec would be able to reach a deal after agreeing to the Algiers gathering. Economists had projected the economy would add 180,000 jobs in August.
Higher interest rates could strengthen the dollar, which could depress oil prices as the commodity becomes more expensive for holders of other currencies.
“If no adjustment to imports is made, then inventories of crude oil could [continue to] balloon”, said Tim Evans, a Citi Futures analyst. The Dollar Index, which measures the value of the U.S. currency against a basket of foreign currencies, was 0.33% lower at the time of writing.
Still, Mr. Lipow said that the lingering glut of oil can’t be ignored.
For weeks market participants have been weighing statements from major oil exporters, trying to determine whether an agreement to limit production is likely.
Vladimir Putin, Russia’s president, commented that he supports output freeze talks.
What kicked off the oil price rally this month was a comment by Saudi energy minister Khalid al-Falih that Saudi Arabia was willing to cooperate with other countries “if there is a need to take any action to help the market rebalance”.
“Prices are up on a weaker dollar in the aftermath of the U.S. ISM numbers yesterday and Putin’s latest attempt to stabilise the price”, said Saxo Bank senior manager Ole Hansen.
“It should be kept in mind that concerns remain elevated over the excessive oversupply of oil in the global markets while the fading hopes over Opec securing a freeze deal in September’s informal meeting continue to cap upside gains”.
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“Oil recovered momentum to find itself back above $44 on Friday with this being linked to dollar weakness. following a disappointing headline non-farm payrolls reading”, said FXTM analyst Jameel Ahmad. Natural gas fell 10 cents to US$2.79 per 1,000 cubic feet.
