|06 March, 2019

Wednesday outlook: Oil prices likely to play ‘tug of war’

Asian shares were mainly flat early on Wednesday, despite a drop on Wall Street overnight. Most stock markets in the Middle East retreated on Tuesday

Image used for illustrative purpose. BP's Huge oil refinery complex continues it's 24 hour production of petroleum and gas

Image used for illustrative purpose. BP's Huge oil refinery complex continues it's 24 hour production of petroleum and gas

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  • Oil drops as data shows higher U.S. crude stockpiles
  • Asian shares unchanged on Wednesday
  • Most markets in the Middle East drop on Tuesday
  • Dollar rises, gold unchanged

Oil prices

Oil prices dropped early on Wednesday after data from the American Petroleum Institute (API), showed larger-than-expected United States crude stockpiles.

U.S. crude inventories rose by 7.3 million barrels in the week ending March 1 to 451.5 million, compared with analysts’ expectations for an increase of 1.2 million barrels, API said. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.1 million barrels.

International Brent futures were down 55 cents, or 0.8 percent, at $65.31 a barrel at 0209 GMT.

U.S. West Texas Intermediate crude futures were at $56.05 per barrel, down 51 cents, or 0.9 percent.

“Oil is likely to play ‘tug of war’ here, with production cut promises to be countered with rising output from the U.S.,” Edward Moya, senior market analyst, OANDA, told Reuters.

Global markets

Asian shares were mainly flat early on Wednesday, despite a drop on Wall Street overnight.

MSCI’s broadest index of Asia-Pacific shares outside Japan nudged up 0.05 percent, while Japan’s Nikkei declined 0.6 percent.

Overnight on Wall Street, the Dow Jones Industrial Average fell 13.02 points, or 0.05 percent, to 25,806.63, the S&P 500 lost 3.16 points, or 0.11 percent, to 2,789.65 and the Nasdaq Composite dropped 1.21 points, or 0.02 percent, to 7,576.36.

The pan-European STOXX 600 index closed up 0.15 percent on Tuesday.

Middle East markets

Dubai’s index dropped 0.3 percent on Tuesday. Emaar Malls dropped 2.9 percent and Emaar Development was down 3.1 percent.

Abu Dhabi's index was down 0.3 percent with the country's biggest lender, First Abu Dhabi Bank, falling 0.7 percent.

The Saudi index dipped 0.1 percent with Al Rajhi Bank sliding 0.3 percent and Saudi Basic Industries losing 0.2 percent.

Qatar's index fell 1.1 percent, with Vodafone Qatar losing 3.2 percent, Qatar National Bank dropping 2.7 percent and Industries Qatar retreating 2.4 percent.

Egypt's blue-chip index EGX30 fell 0.6 percent with its largest lender Commercial International Bank Egypt sliding 2 percent and Egyptian Chemical Industries decreasing 1 percent.

Kuwait’s premier market index added 0.4 percent, Oman’s index gained 0.3 percent and Bahrain’s index edged 0.1 percent higher.

Currencies

The dollar rose early on Wednesday.

The dollar index, which measures the greenback against a basket of six major currencies, rose 0.16 percent.

Precious metals

Gold prices steadied on Wednesday.

Spot gold was flat at $1,286.77 per ounce as of 0123 GMT, after touching its lowest since Jan. 25 at $1,280.70 in the previous session.

U.S. gold futures were up about 0.3 percent at $1,287.90 an ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


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