Oil Rises on Softer Dollar, Shipping Attack

Oil prices rose for a second day on Thursday, buoyed by a softer dollar and another attack on shipping near Yemen.

Brent crude futures rose 35 cents, or 0.4%, to $83.38 a barrel at 1036 GMT. U.S. West Texas Intermediate crude futures climbed 37 cents, or 0.5%, to $78.28 a barrel.

The dollar index slipped 0.3% to 103.66, supporting prices. A weaker dollar usually boosts oil prices, making it cheaper for buyers holding other currencies.

Two missiles were fired at a vessel off the southeast coast of Yemen on Thursday, causing a fire onboard, British maritime agencies said, as Houthis keep up attacks on shipping to show support for the Palestinians in the Gaza war.

".... [Hostilities] in and around the Red Sea by Iran-backed Houthi rebels on commercial ships are guaranteed to continue keeping the geopolitical risk premium at an elevated level," PVM Oil's Tamas Varga said.

A rise in U.S. crude inventories, however, tempered further price gains.

U.S. crude stocks rose 7.17 million barrels in the week ended Feb. 16, market sources citing American Petroleum Institute figures said on Wednesday. Gasoline stockpiles also rose while distillate fuel inventories declined. [API/S]

U.S. crude inventories have climbed amid outages at large refineries that have left utilisation rates at the lowest level in two years, though the plants are resuming output.

BP's 435,000 barrel-per-day (bpd) refinery in Indiana, the largest in the U.S. Midwest, will return to full production in March, according to people familiar with plant operations, after a power outage from Feb. 1.

TotalEnergies' 238,000-bpd refinery in Port Arthur, Texas, is also working to complete a restart, though it is still operating minimally following a weather-related power outage.

Analysts expect U.S. refinery run rates to have risen to 81.5% last week from 80.6% of total capacity in the previous week, according to a Reuters poll.

Investors await official inventory data from the U.S. Energy Information Administration (EIA) due at 1600 GMT on Thursday, having been delayed by one day due to a U.S. holiday.

February 22, 2024