Oil gains ground, dollar climbs off six-week trough

Oil futures rose in American trade on track for weekly gains, while the dollar index managed to score gains as well away from six-week lows, following earlier data from China, the world's largest energy importer, and the US. 

As of 05:04 GMT, US crude futures due in October rose 0.83% to $69.16 a barrel, while Brent November futures inched up 0.22% to $78.35 a barrel, as the dollar index advanced 0.39% to 94.88 against a basket of major rivals. 

US Inventory Drawdown 

On Wednesday, the Energy Information Administration released its report on US crude stocks, showing a decline of 5.3 million barrels in the week ending September 7, compared to a 4.3 million deficit in the previous reading, while analysts expected a 1.3 million drop, with total stocks now down to 396.2 million barrels, making them 3% below five-year averages for this time of year. 

Gasoline stocks rose 1.3 million barrels, making them 8% above averages, while distillate stocks, including heating fuel, rose 6.2 million barrels, still 3% below averages. 

IEA Releases Monthly Report 

The International Energy Agency reported that risks for demand outlook in 2019 are still ongoing, such as weakness in emerging economies due to currency and trade issues, however the impact remains limited, with expectations prices will surpass $80 a barrel if producers didn't ramp up production to compensate drops in Iranian and Venezuelan output. 

The EIA expects global demand in the current quarter at 100.3 million bpd, before receding by a million bpd in 2019, while reporting that supplies reached a record 100 million bpd last month. 

OPEC took the lion share as usual at 32.62 million bpd, the highest in nine months despite cuts in Iranian and Venezuelan production, while US output slipped 100 thousand bpd to 10.9 million bpd. 

US Oil Rig Count 

Baker Hughes, a US oil services company, reported an increase of 7 rigs in the oil rig count to a total of 867 rigs. 

Chinese Data 

Earlier Chinese data showed the unemployment rate down to 5.0% from 5.1%, while retail sales rallied 9% y/y, slowing down from 8.8% in July. 

China's industrial output rose 6.1% y/y in August, up slightly from 6.0%, while fixed-income investments rose 5.3%, slowing down from 5.5%. 

US Retail Sales, Industrial Data 

Earlier US data showed retail sales rose 0.1%, slowing down sharply from 0.7% in July, and missing estimates of 0.4%. 

Import prices fell 0.6% m/m, compared to no change in July, while analysts expected a 0.2% drop. 

US industrial production rose 0.4% in August, same as July, and beating estimates of a 0.3% increase. 

The capacity utilization rate rose to 78.1% from 77.9% in July, missing  estimates of 78.3%. 

University of Michigan released its survey on consumer sentiment, showing a surge to 100.8 in September, the best in six months, from 96.2 in August, beating estimates of 96.7.