Investing.com -- Crude futures see-sawed on a choppy, volatile day of trading, retreating from two-week highs ahead of the American Petroleum Institute's weekly crude inventory report on Tuesday evening after the close of trading.
On the New York Mercantile Exchange, WTI crude for September delivery traded between $42.51 and $43.48 a barrel before closing at $42.66, down 0.36 or 0.84% on the session. At session-highs, the front month contract for U.S. crude hit its highest level since July 25, the last time it traded above $44 a barrel. On the Intercontinental Exchange (ICE), brent crude for October delivery wavered between $44.80 and $45.73 a barrel, before settling at $44.87, down 0.52 or 1.15% on the day.
Despite a relief-rally from 3-month lows at the start of last week, crude futures have still tumbled approximately 15% from 10-month highs in mid-June when both the U.S. and international benchmarks of crude eclipsed $50 a barrel.
Energy traders will receive a clearer picture of the supply-demand balance on U.S. markets when the API releases its latest crude stockpile on Tuesday night following close of markets. Separately, Wednesday's government report could show that crude inventories nationwide fell by 1.0 million barrels for the week ending on August 5. Over the previous week, U.S. crude stockpiles unexpectedly rose by 1.4 million barrels defying analysts' expectation for a 1.4 million draw. At 522.5 million barrels, U.S. crude oil inventories are at historically high levels for this time of year.
Analysts will keep a close eye on Gasoline inventories, which are expected to decline by 1.2 million for the week. During the last week of July, gasoline stockpiles unexpectedly fell by 3.3 million barrels, amid a considerable drawdown throughout the PADD 1 district, covering the majority of the U.S. east coast. In recent weeks, worldwide gasoline inventories have swelled to around 500 million barrels, according to analysts from Citigroup Inc (NYSE:C), as refineries churn out product at a rapid pace due to historically low crude prices.
Elsewhere, Iran exported 1.72 million barrels per day in June to China, India, Japan and South Korea, the Islamic Republic News Agency (IRNA) reported on Tuesday, marking a 47% increase from its level in January. Last month, senior officials from Iran's state-run National Iranian Oil Company told Bloomberg that the Gulf state expects to double exports from its pre-sanction levels in an effort to regain market share, as long as demand abroad remains high.
In India, the nation consumed 48.5 million tons of oil for the three-period ending in June, representing the swiftest pace of demand growth in more than a decade. Currently, OPEC provides 85% of all oil imports to India, more than half of which is supplied by Saudi Arabia, Iraq and Iran, according to Clipper Data. While a number of analysts expect global markets to rebalance at some point in 2017, the return of Iran to markets in February following the removal of longstanding economic sanctions has exacerbated concerns related to the worldwide supply glut.
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 96.02. The index is virtually flat over the last month.
Dollar-denominated commodities such as Crude become more expensive for foreign purchasers when the dollar appreciates.