|01 May, 2019

Wednesday outlook: Oil prices retreat on higher U.S. crude inventories

Brent crude oil futures were at $71.59 per barrel at 0402 GMT, down 47 cents, or 0.7 percent, from their last close

Image used for illustrative purpose. A man works on the rig of an oil drilling pump site in McKenzie County outside of Williston, North Dakota March 12, 2013.

Image used for illustrative purpose. A man works on the rig of an oil drilling pump site in McKenzie County outside of Williston, North Dakota March 12, 2013.

REUTERS/Shannon Stapleton
  • Oil prices drop on API report
  • U.S. and European shares end Tuesday higher
  • Abu Dhabi’s index drops 1.4 percent as FAB retreats
  • Dollar drops, gold steadies

Oil prices

Oil prices dropped early on Wednesday as a report from the American Petroleum Institute (API) showed on Wednesday that United States crude stocks rose by 6.8 million barrels to 466.4 million barrels in the week to April 26.

Brent crude oil futures were at $71.59 per barrel at 0402 GMT, down 47 cents, or 0.7 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were down 60 cents, or 0.9 percent, at $63.31 per barrel.

“Crude prices are off ... after the weekly API oil inventory report showed a build of 6.8 million barrels, up from the draw of 3.1 million barrels we saw last week,” Edward Moya, senior market analyst at futures brokerage OANDA, told Reuters.

Global markets

Wall Street and European shares rose on Tuesday, despite starting the day slower on weak Chinese data.

The Dow Jones Industrial Average rose 38.11 points, or 0.14%, to 26,592.5, the S&P 500 gained 2.78 points, or 0.09%, to 2,945.81 and the Nasdaq Composite dropped 54.09 points, or 0.66%, to 8,107.77.

The pan-European STOXX 600 index rose 0.01% and MSCI’s gauge of stocks across the globe gained 0.13%. MSCI’s broadest gauge of Asia-Pacific shares outside Japan was off 0.7 percent.

According to a Reuters report, investors were looking ahead to a policy statement from the Federal Reserve on Wednesday and payrolls data at the end of the week. The Fed is largely expected to leave U.S. interest rates unchanged as it seeks to balance solid economic growth against low inflation.

Many global markets will be closed today on account of International Labour Day.

Middle East markets

Abu Dhabi’s index dropped 1.4 percent on Tuesday, as First Abu Dhabi, the UAE's largest bank, fell 2.4 percent.

Dubai's index added 0.3 percent as Emaar Properties gained 2.1 percent.

Saudi Arabia’s index edged 0.3 percent higher with Gulf General Cooperative Insurance jumping 7.1 percent to end as the top gainer after the company's board proposed a capital increase of 300 million riyals ($80 million) through a rights issue.

Qatar's blue-chip index edged up by 0.2 percent, helped by Gulf International Services and Industries Qatar.

Egypt’s blue-chip index EGX30 gained 1 percent as Commercial International Bank (COMI) rose 3.1 percent.

Kuwait’s premier market index edged 0.1 percent higher, Bahrain’s index edged 0.2 percent lower and Oman’s index rose 0.3 percent.

Currencies

The dollar retreated early on Wednesday.

The dollar index, which measures the greenback against a basket of six major currencies, was down 0.38% at 97.489.

Precious metals

Gold prices were mainly unchanged.

Spot gold was nearly steady at $1,282.01 per ounce as of 0107 GMT.

U.S. gold futures were also little changed at $1,284.30 an ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


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