By Claudia Assis and Nick Godt, MarketWatch
NEW YORK (MarketWatch) — Crude-oil futures bounced back Wednesday from their biggest one-day slump in eight months, as the dollar gave up prior-session gains scored after China spooked financial markets with a rate hike.
Traders’ attention turned to what weekly data on U.S. petroleum supplies from the Energy Department will show.
Crude for November delivery (CLX10 79.95, +0.46, +0.58%) traded up 43 cents, or 0.5%, to $79.92 a barrel on the New York Mercantile Exchange.
The dollar index (DX 10.67, +0.16, +1.48%) fell to 77.45, down 0.9%, after gaining more than 1% on Tuesday, its biggest advance since August.
On Tuesday, the contract slumped 4.3%, the biggest one-day drop since February, after China’s surprise move. But by Wednesday, the markets were trying to put Beijing’s actions in perspective, according to Mike Fitzpatrick, vice president of energy trading at MFGlobal.
“China’s attempt to slow its economy [hasn’t] had an impact on oil and fuel demand,” he wrote in a note.
Late Tuesday, the American Petroleum Institute estimated an increase of 2.3 million barrels of crude oil in the nation’s inventories for the week ended Oct. 15, slightly above expectations.
The government’s data, watched more closely by energy traders, are scheduled for release at 10.30 a.m. Eastern.
Analysts polled by Platts are looking for an increase of 2.1 million barrels in crude for the latest week.
Meanwhile, almost all of France’s refineries remain shut, as does the key oil port of Fos Lavera near Marseille, and French companies have started to tap into their emergency reserves, according to news and analyst reports. Demonstrators are protesting a government plan to raise France’s retirement age. Read more on France’s fuel blockades.
“With the [French] Senate set to vote on the reform on Thursday, our macroeconomists expect the protests to recede by the end of the week if the reforms are passed successfully, which would end the long stand-off crippling the European product market,” analysts at Barclays Capital said in a note to clients Wednesday.
Approaching holidays in France, however, are likely to keep the backlog of crude and products, they added.
Gasoline for November delivery (RBX10 2.04, -0.11, -5.27%) was up less than a penny at $2.05 a gallon. Some analysts had mentioned France’s strike and oil-supply disruptions as supportive for gasoline futures stateside.
