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Last Updated : Sep 09, 2015 12:04 AM IST | Source: Investing.com

Crude futures mixed amid refinery shutdowns, $5B Venezuela-China deal

Crude futures mixed amid refinery shutdowns, $5B Venezuela-China deal


Investing.com -

Investing.com -- U.S. crude futures fell mildly on Tuesday, while the global benchmark of crude rallied sharply from a massive sell-off one session earlier in a day of deviated trading.

On the New York Mercantile Exchange, WTI crude for October delivery wavered between $44.15 and $46.40 a barrel before settling at $45.85, down 0.20 or 0.45% on the session. U.S. crude futures remain up by nearly 20% since August 25 when they touched down to a fresh six-and a half year low around $38 a barrel. U.S. markets were closed on Monday for the Labor Day holiday.

On the Intercontinental Exchange (ICE), brent crude for October delivery traded in a broad range between $47.65 and $49.83 a barrel before closing at $49.44, up 1.80 or 3.85% on the day. One session earlier, brent futures plummeted 6% amid continuing worries related to a glut of oversupply on the global markets. The spread between the international and U.S. benchmarks of crude stood at $3.59, slightly above Friday's level of $3.58 at the close.

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Texas Long Sweet futures fell slightly during Tuesday's session amid shutdowns at two gas refineries throughout the nation. In Baton Rouge, Louisiana, Exxon Mobil Corporation (NYSE:XOM) shut down a 502,500 crude distillation unit, one of its largest in the country, underscoring the impact of crashing oil prices. On Monday, Phillips 66 (NYSE:PSX) shut down its gasoline refinery in Wood River, Illinois following the malfunction of a critical cracking unit needed to help complete the conversion process. The gasoline production unit, which produces more than 300,000 barrels per day, is expected to reopen within the next 48 hours, a source told Reuters.

Elsewhere, Venezuela president Nicolas Maduro said his nation has signed a deal for a $5 billion loan from China aimed at helping boost its oil production. Appearing on Venezuelan-state run television on Tuesday, Maduro indicated that the deal will help the country bolster crude output in a "gradual way" over the coming months. Crude proceeds from Venezuela's state-run oil companies account for 50% of its government revenue, 95% of its exports and 25% of its GDP, according to the U.S. Council on Foreign Relations. Venezuela, one of the world's largest exporters of oil, has been hammered by the downturn in crude prices in recent months.

On Capitol Hill, U.S. senate democrats secured enough votes to thwart a Republican-led resolution against an Iranian nuclear deal, paving the way for U.S. president Barack Obama to veto any challenge against the bill. When a framework of a deal was reached between Iran and a group of major Western powers in April, Facts Global Energy, an energy consulting firm, forecasted that the Iranian oil exports could reach a level of 1.7 million barrels per day within 12 months of the easing of longstanding economic sanctions against the gulf state. Iran is reportedly hoarding 30 million barrels of crude ready for export.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, reached an intraday high of 96.25 before falling back to 96.04, down 0.11% in U.S. afternoon trading. Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.

Investing.com


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First Published on Sep 9, 2015 12:04 am
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