By Claudia Assis and Michael Kitchen, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures on Tuesday hovered at their highest in three months, extending gains to a third day. Europe’s benchmark oil also traded at a three-month high.
Crude for September delivery CLU2 +0.50% gained 66 cents, or 0.7%, to $92.89 a barrel on the New York Mercantile Exchange.
Momentum buying, positive prospects for U.S. stocks, and a weaker dollar helped engineer oil’s gains.
The ICE dollar index DXY -0.22% , which compares the U.S. unit to a basket of six currencies, declined to 82.098, from 82.175 late Monday in North America.
Brent crude rose 91 cents, or 0.8%, to $110.45 a barrel on ICE Futures in London.
U.S. stocks rose at the open. Investors also expected the week’s reports on inventories to show a decline.
The American Petroleum Institute is expected to release its data later Tuesday. A report from the Department of Energy follows on Wednesday. Analysts polled by Platts expect inventories of crude to have declined by 300,000 barrels in the week ended Aug. 3.
Retail gasoline surging
Elsewhere in the energy complex, September gasoline RBU2 +0.52% rose 1 cent, or 0.5%, to $2.94 a gallon.
Retail gasoline prices in the U.S. were a very different story, however, with the Energy Information Administration reporting a 13.7-cent surge to an average price of $3.645 a gallon for the week ended Monday.;
The leap in retail pump prices — the largest one-week jump since May 2009 — came on the heels of several refinery and pipeline problems, particularly in the Midwest. Read more on U.S. retail gasoline price rise.
Adding to such issues, Chevron Corp. CVX +0.49% said late Monday that its refinery in Richmond, Calif., was on fire. No fatalities were reported, but authorities urged Richmond residents to stay indoors to avoid toxic chemicals released by the fire.
The Richmond refinery reportedly represents about 10% of the refining capacity on the U.S. West Coast. Read more on Chevron fire.
Among other energy contracts, September natural gas NGU12 +0.89% gained 2 cents, or 0.5%, to $2.92 per million British thermal units.
September heating oil HOU2 +0.72% advanced 2 cents, or 0.7%, to $2.96 a gallon.
Analysts were also monitoring supply issues in the Middle East. An Iraqi pipeline was bombed earlier this week, with repairs expected to last more than a week, analysts at JBC said in a note to clients Tuesday.
It is the second instance of sabotage in the area in three weeks, the analysts said.
“The increase in sabotage activity highlights instability in the region and, together with growing sectarian tensions in Iraq, is beginning to cast doubts on Iraq’s ambitious plan to boost production to 8 million (barrels a day) by 2020,” they wrote.
Investors also grappled with the possibility of a hurricane brewing in the Gulf of Mexico. Tropical Storm Ernesto is forecast to move across the Yucatan peninsula and emerge over the Bay of Campeche on Wednesday, but it is unclear whether it would affect Mexico’s oil industry.
“Nonetheless, this serves as a reminder that the most active period of the hurricane season is about to start, and is thus likely to lend psychological support to oil prices,” analysts at Commerzbank said in a note to clients.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
