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- Oil prices surge on the API data
- Asian shares drop on Fed comments
- Gulf markets close mixed on Tuesday
- Dollar edges up, gold drops
Oil prices
Oil prices surged early on Wednesday after data by the American Petroleum Institute (API) showed a drop in the United States’ crude inventories.
U.S. crude stockpiles fell by 7.5 million barrels in the week ended June 21 to 474.5 million, compared with analyst expectations for a decline of 2.5 million barrels, the data showed.
Front-month Brent crude futures, international benchmark for oil, were up 1.3% at $65.91 by 0341 GMT. They earlier touched their highest since May 31 at $66 a barrel.
U.S. West Texas Intermediate (WTI) crude futures were at $58.98 per barrel, up 1.8% from their last settlement. WTI earlier hit its strongest level since May 30 at $59.03 a barrel.
“Oil prices went ballistic after the API report,” Stephen Innes, a managing partner at Vanguard Markets, told Reuters.
“Oil prices have been squeezing higher on escalating tensions in the Middle East. But with late-day draws showing up in the API report, this is a strong signal for the energy market,” Innes said.
Global markets
Asian shares dropped early on Wednesday as the Federal Reserve cooled down aggressive rate cut expectations.
Fed Chair Jerome Powell on Tuesday said the central bank is “insulated from short-term political pressures.” Powell, however, said Fed policymakers are wrestling with questions on whether uncertainties around U.S. tariffs, Washington’s conflict with trading partners and tame inflation require a rate cut.
The Shanghai Composite Index edged down 0.15% and Hong Kong’s Hang Seng lost 0.1%.
MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.2%.
“While Powell’s comments do not alter expectations that the Fed will ease sooner or later, they do leave a slightly negative impact on equities,” Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management, told Reuters.
Middle East markets
Saudi Arabia’s index rose 0.6 percent on Tuesday, with Riyad Bank adding 2.8% and Saudi British Bank climbing 2.7%.
The Abu Dhabi index closed 0.5% lower, weighed down by a 0.4% drop in Emirates Telecommunications Group and a 0.7% decline in the country's major lender First Abu Dhabi Bank.
In Dubai, the index was also down 0.6%, with blue chip developer Emaar Properties dropping 1.3% and its top lender Emirates NBD Bank slipping 0.9%.
Qatar's index gave up early gains to trade 0.5% down at close. Petrochemical maker Industries Qatar decreased 1.3% and Qatar Islamic Bank dropped 1.1%.
Egypt’s EGX30 dropped 0.3 percent, Kuwait’s premier market index edged 0.2 percent higher while Oman’s index dropped 0.5 percent and Bahrain’s index gained 0.5 percent.
Currencies
The dollar edged up early on Wednesday following comments from the Fed.
The dollar index, which measures the greenback against a basket of six major currencies, stood at 96.176 on Wednesday, just above a three-month low of 95.843 touched on Tuesday.
Precious metals
Gold prices dropped as the dollar rose.
Spot gold was down 0.6% at $1,415.01 per ounce as of 0122 GMT, after hitting its highest since May, 2013 at $1,438.63 in the previous session.
U.S. gold futures were steady at $1,418.50 an ounce.
Reporting by Gerard Aoun; Editing by Mily Chakrabarty)
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