August crude settled at $50.36 a barrel, up 21 cents, or 0.4%, on the New York Mercantile Exchange. It lost 1.5% in the previous session, falling to $50.15 a barrel, the lowest settlement price since early April. The August Nymex contract expired at Tuesday’s settlement. September crude the new front-month contract, rose 42 cents, or 0.8%, to settle at $50.86. Nymex crude has now fallen for five consecutive trading sessions and has lost more than 14% so far this month.
September Brent crude on London’s ICE Futures added 39 cents, or 0.7%, at $57.04 a barrel. Nymex oil prices “staunchly” defended the “psychological $50 dollar mark,” getting a boost from significantly oversold conditions to climb amid a retracing dollar, said Matt Smith, director of commodity research at ClipperData.
The ICE U.S. dollar index fell about 0.7% following recent gains, helping support the oil move higher. A weaker greenback can help lift prices for dollar-denominated commodities. The market also likely saw “book squaring” ahead of WTI crude-oil contract expiration and upcoming U.S. weekly inventory data, according to Tim Evans, an energy analyst at Citi Futures. Still, Evans said he doesn’t see a “fundamental case for a sustained price rally given the ongoing global supply/demand surplus.”
Late Tuesday, the American Petroleum Institute will publish weekly U.S. oil inventory data, followed by a report from the U.S. Energy Information Administration on Wednesday. Analysts surveyed by Platts forecast a weekly decline of 1.9 million barrels for crude supplies. On Monday, the U.N. Security Council unanimously endorsed the nuclear accord between Iran and six world powers, setting in motion a years long process to eventually lift international sanctions in exchange for stringent new controls on Tehran’s nuclear program. “The deal paves the way for the removal of international sanctions by [first quarter 2016] at the earliest and we do not expect new exports in 2015,” analysts at BMI Research said in a report. BMI expect a quick rise in Iran’s oil production over 2016, reaching 600,000 barrels a day of new output by the end of the year, but said production may stagnate after initial gains.