Investing.com -- Crude futures rose considerably on Tuesday erasing most of their losses from the previous session, ahead of the release of the American Petroleum Institute's weekly crude supply report after the close of trading.
On the New York Mercantile Exchange, WTI crude for November delivery traded in a tight range between $44.35 and $45.70 a barrel, before settling at $45.27, up 0.82 or 1.83% on the session. It came one day after NYMEX oil prices slid more than 2%, amid stronger indications from the Federal Reserve that it will raise interest rates before the end of the year. U.S. crude futures have now closed higher in three of the last five sessions. While WTI crude has gained more than 2.25% in value over the last month of trading, it still remains only slightly above its late-August level when it crashed to fresh six and a half year lows.
On the Intercontinental Exchange (ICE), brent crude for November delivery wavered between $47.27 and $48.62 a barrel, before closing at $48.27, up 0.92 or 1.95% on the day. The spread between the international and U.S. domestic benchmarks of crude stood at $3.00, slightly above Monday's level of $2.98 at the close.
Investors await the release of API's weekly crude inventory report on Tuesday after the bell for further indications on the supply-demand balance in U.S. energy markets. Separately, Wednesday's government report could show that crude stockpiles nationwide fell by 0.5 million barrels for the week ending on September 25.
Last week, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that U.S. crude inventories decreased by 1.9 million barrels for the week ending Sept. 18, extending a 2.1 million barrel draw from a week earlier. At 454.0 million barrels, U.S. crude stockpiles last week still remained near their highest levels in at least 80 years.
U.S. crude production, meanwhile, crept up last week, ending a seven-week streak of declines. Crude output nationwide rose by 19,000 to 9.136 million barrels per day, following a moderate increase in Alaskan ouput. In early-June, crude production in the U.S. peaked above 9.6 million barrels per day, its highest on record in more than 40 years. U.S. shale producers, however, have been forced to slash output as crude prices have remained under $50 a barrel over the last two months.
On Monday, Shell (LONDON:RDSa) announced that it would halt offshore drilling in Alaska for the near future after a critical exploration well failed to produce sufficient levels of oil and gas. In May, the company received approval from the federal government to drill in the Chukchi Sea, located about 150 miles from Barron, Alaska.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell more than 0.20% to an intraday low of 95.83, in spite of strong consumer data. Last week, the index surged above 96.85 to reach its highest level in September.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.