Oil hits multi-month highs as dollar climbs off ten-week trough

Oil futures rose in American trade, with US crude hitting July 11 highs, while Brent scaled May 10 highs, even as the dollar index regained its footing today following earlier data. 

As of 05:27 GMT, US crude futures due in November rose 1.18% to $71.15 a barrel, while Brent November futures added 0.38% to $79 a barrel, as the dollar index climbed 0.36% to 94.25 against a basket of major rivals. 

Another US Inventory Drawdown 

On Wednesday, the Energy Information Administration released its report on US crude stocks, showing a drop of 2.1 million barrels in the week ending September 14, compared to a 5.3 million decline in the previous reading, while analysts expected a 2.7 million decline, with total stocks receding to 394.1 million barrels, making them 3% below five-year averages for this time of year. 

Gasoline stocks fell 1.7 million barrels, still 8% above five-year averages, while distillate stocks, including heating fuel, rose 0.8 million barrels, still 2% below five-year averages. 

The drop in US crude inventories boosted prices alongside the impending sanctions on Iranian oil exports, with oil prices now heading for second weekly gains. 

In recent remarks, President Donald Trump linked US support to Middle Eastern countries with their efforts to stabilize and lower oil prices within the frame of OPEC. 

Trump tweeted: "We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!"

OPEC oil ministers are scheduled to meet with their counterparts from outside OPEC in Algeria next Sunday to discuss latest market updates and current production levels, especially with the recent drop in Iranian supplies after US sanctions. 

US Oil Rig Count 

Baker Hughes, a US oil services company, reported a drop of one rig in the oil rig count last week to a total of 866 rigs.