MOSCOW (MRC) -- Crude oil futures rose during morning trade in Asia Aug. 27 as investors sought to take advantage of lower prices following an overnight decline and the retreat of the dollar, reported S&P Global.
At 11:19 am Singapore time (0319 GMT), the ICE October Brent futures contract was up 80 cents/b (1.11%) from the previous close at USD71.87/b while the NYMEX October light sweet crude contract rose 68 cents/b (1%) to USD68.10/b.
"Prices are slightly higher as the DXY US Dollar index retreated," said Margaret Yang, DailyFX Strategist at IG on Aug. 27.
The dollar index traded at 93.03 at 11:19 am Singapore time, marking a 0.2% decline from the Aug. 26 close.
However, despite the rise in oil prices, uncertainties on whether the US Federal Reserve will taper its asset purchase program, mounting tension in the Middle East and rising COVID-19 cases continue to cloud market outlook.
"Even though the FDA's full approval of the COVID-19 vaccine developed by Pfizer and BioNTech boosted inflation optimism, sending oil prices 10% higher this week, the rally appears to have run out of steam, as investors are eyeing the Jackson Hole symposium and mulling over rising COVID-19 cases in Japan and Australia," Yang added.
All eyes will be on the upcoming Jackson Hole Symposium for clarity on the US Federal Reserve's position on the tapering of its asset purchase program. Most market watchers expect the Fed's Chairman Jerome Powell to adopt a more hawkish stance, announcing a tapering in September, a move likely to herald rising interest rates and a stronger dollar, which will in turn be bearish for energy prices.
Meanwhile, the OPEC+ alliance is set to hold its own meeting Sept. 1 to review policy, with some market sources expecting the group to hold off on easing supply in the wake of the recent resurgence in COVID-19.
As MRC informed previously, crude oil stockpiles fell modestly in early August, while gasoline inventories dipped to their lowest level since November, according to the US Energy Information Administration. Crude inventories fell by 447,000 barrels in the week to Aug. 6 to 438.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop. Overall crude inventories have been on the decline for several weeks due to increased demand.
We remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.