Oil heads for weekly advance as dollar eases, US exports boom

Oil headed for a weekly gain, supported by tightness in petroleum product markets, robust US exports, and a weakening US dollar.

West Texas Intermediate eased below $89 a barrel in early Asian trade but remains more than 4 per cent higher this week. Total US petroleum exports have hit a record, while domestic fuel inventories are at historic seasonal lows. Diesel markets in both the US and Europe are flashing signs of tightness.

The US dollar is set for a second weekly drop, making commodities priced in the currency cheaper for overseas buyers. The greenback has backtracked even as the Federal Reserve presses on with rate hikes to quell raging inflation.

Crude is on course to gain in October following a run of four monthly declines as slowdown concerns escalated.

This month’s advance has come after the Organization of Petroleum Exporting Countries and its allies cut output, tightening the supply outlook as the crisis in Ukraine drags on. In addition, refiners in top importer China have snapped up millions of barrels as they plan to ramp up fuel exports.

Reflecting the year’s robust crude market, Shell and TotalEnergies released bumper earnings on Thursday. US majors Chevron Corp. and Exxon Mobil Corp. are due to report financial results later Friday.