Oil up on weak dollar though US-China tensions weigh

A rancher walks past a pump jack in Loving County, Texas. Brent is on track for a fourth straight monthly gain in July and WTI is set to rise for a third month. (Reuters/File)
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Updated 28 July 2020

Oil up on weak dollar though US-China tensions weigh

  • Hurt by domestic economic concerns, dollar index reaches its lowest since Sept. 2018

SINGAPORE: Oil prices edged higher on Monday helped by a weak dollar and expected US stimulus measures but gains were capped by rising global coronavirus cases and tensions between the United States and China.

Brent crude rose 32 cents, or 0.7 percent, to $43.66 a barrel, while US West Texas Intermediate (WTI) crude was up to $41.62 a barrel or 33 cents.

The US dollar index reached its lowest since September 2018, hurt by deteriorating US-China relations and domestic economic concerns as coronavirus infections showed no sign of slowing.

“Massive monetary stimulus has bullish implications for oil,” analysts from Raymond James said in a note, adding that oil prices have historically moved upwards with inflation spikes and that the current US money supply increase is unprecedented.

Oil price gains were capped by escalating China-US tensions following the closures of consulates in Houston and Chengdu. Global coronavirus cases, meanwhile, exceeded 16 million.

In Asia, fresh lockdowns were imposed and in Europe, Britain imposed a quarantine on travelers returning from Spain.

Brent is on track for a fourth straight monthly gain in July and WTI is set to rise for a third month. Helping are unprecedented supply cuts from the Organization of the Petroleum Exporting Countries and others including Russia.

Output has also fallen sharply in the United States although the US oil rig count rose last week for the first week since March.

Oil demand has improved from the deep trough of the second quarter, although the recovery path is uneven as resumption of lockdowns in the United States and other parts of the world is capping consumption.

“Oil appears to be caught between opposing forces, crushing price volatility and ranges,” said Jeffrey Halley, senior market analyst for the Asia Pacific at OANDA.


Egypt inaugurates $3.4M hyrdocracking complex to produce petroleum products

Updated 27 September 2020

Egypt inaugurates $3.4M hyrdocracking complex to produce petroleum products

CAIRO: A new hydrocracking complex worth $3.4 million was inaugurated on Sunday by the Egyptian president in a ceremony north of Cairo.

The complex will produce 4.7 million tons of high-value petroleum products as part of Egypt’s ambitious program to enhance its refining industry, a local report said. 

It was established in cooperation with the private sector to produce high-octane gasoline and diesel. It converts low-value diesel into high-quality petroleum products, which include hydrocracking units for diesel, charcoal, vacuum distillation, sulphur treatment and naphtha repair, according to a report by Egypt Today news website. 

Work at the site, located in Musturud of Qalyubia governorate, began in 2011 but was halted due to the political turmoil that broke out that year, the Egyptian president said. 

President Abdel Fatah El-Sisi asked Egyptians to realize “the size of benefits from a complex like this for Egypt in the field of petroleum,” in statements quoted by Youm 7 newspaper.