WTI Crude Rebounds as Dollar Weakens

West Texas Intermediate (WTI) crude futures have stabilized at midday on Thursday, thanks to a significant drop in the U.S. dollar. This helped the petroleum complex recover after experiencing a multi-day pullback that resulted in oil benchmarks hitting a six-month low.

At 11:55 a.m. ET, the NYMEX January-delivered WTI contract rose approximately 10 cents to $69.50 per barrel, while February WTI increased by 5 cents to $69.70 per barrel. On Wednesday, January WTI settled at $69.38 per barrel, which marked the lowest settlement since June 27.

Meanwhile, London-based February ICE Brent crude oil dipped by 10 cents to $74.20 per barrel, and March Brent also experienced a similar decline to $74.35 per barrel.

Refined product futures saw marginal decreases. January NYMEX RBOB dropped by around 2 cents to $2.0105 per gallon, and February RBOB slipped by 1.70 cents to $2.0170 per gallon. Additionally, January ULSD eased by 0.5 cent to $2.5710 per gallon, while February ULSD slightly increased by 0.15 cent to $2.5390 per gallon.

Around noon, the dollar index witnessed a 0.5% drop as investors eagerly anticipated Friday's highly significant jobs report, which will provide valuable insights into the U.S. labor market's health. The weakening U.S. currency makes dollar-denominated crude futures more affordable for investors holding the U.S. dollar.

Prior to Thursday, both oil benchmarks experienced a fifth consecutive day of declines, resulting in a loss of around $8 per barrel or approximately 10% of their value.

Despite OPEC+'s commitment to a 2.2-million-barrel-a-day production cut, spearheaded by Saudi Arabia and Russia, market participants remain skeptical about the cartel's ability to uphold these promised reductions. The lack of stringent penalties for failing to meet quotas contributes to this skepticism.

In the spot market, San Francisco CARBOB premiums soared by roughly 16 cents to 45 cents above January NYMEX RBOB futures, surpassing Los Angeles CARBOB as the most expensive cash gasoline across the United States.

Reporting by Frank Tang; Editing by Andrew Atwal