|22 August, 2019

Thursday outlook: Brent crude prices rise for fifth consecutive session

Crude inventories fell by 2.7 million barrels in the week to August 16 according to the Energy Information Administration (EIA), compared with analysts' expectations for a drop of 1.9 million barrels

Natural gas fired turbine power plant with it's cooling towers rising into a cloud filled blue sky. Image used for illustrative purpose.

Natural gas fired turbine power plant with it's cooling towers rising into a cloud filled blue sky. Image used for illustrative purpose.

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  • Oil prices gain on inventories drawdown
  • Asian shares fail to track Wall Street higher
  • Most Middle East stock markets drop
  • Dollar edges higher, gold flattens

Oil prices

Data that showed a larger-than-expected drawdown in United States crude inventories boosted oil prices early on Thursday.

Crude inventories fell by 2.7 million barrels in the week to August 16 according to the Energy Information Administration (EIA), compared with analysts’ expectations for a drop of 1.9 million barrels.

Brent crude futures LCOc1 climbed for a fifth consecutive session on Thursday, rising 6 cents, or 0.1 percent, to $60.36 a barrel by 0242 GMT on Thursday.

West Texas Intermediate (WTI) crude CLc1 futures rose 10 cents, or 0.2 percent, to $55.78 per barrel.

“Amid mounting market concerns about a slowdown in economic and oil-demand growth, it might come as a surprise that crude oil inventories have actually been plunging,” analysis firm Kayrros said in a note, according to a Reuters report.

Global markets

According to a Reuters report, the Federal Reserve’s July meeting showed policymakers deeply divided over whether to cut interest rates, but united in wanting to signal they were not on a preset path to more easing.

“The key message from the Fed minutes is that the 25 basis-point cut in July was just a calibration, a mid cycle adjustment and not the start of a new easing cycle,” Rodrigo Catril, a senior FX strategist at National Australia Bank, told Reuters.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.2 percent. Overnight on Wall Street, the Dow ended the day up 0.93 percent, while the S&P 500 rose 0.82 percent and the Nasdaq 0.90 percent.

Middle East markets

In Saudi Arabia the index closed 0.9 percent lower with Al Rajhi Bank declining 1.3 percent and Riyad Bank losing 1.5 percent.

Dubai's index edged up 0.1 percent as Emirates NBD gained 1.3 percent and Emirates Integrated Telecommunications increased 1.8 percent.

In Abu Dhabi, the index dropped 0.6 percent with the United Arab Emirates' largest lender First Abu Dhabi Bank slipping 0.4 percent.

Qatar's index fell 0.2 percent. Petrochemical maker Industries Qatar dropped 2.3 percent and Barwa Real Estate lost 1.5 percent.

Egypt's blue-chip index EGX30 decreased 0.5 percent, led by a 0.5 percent drop in its largest lender Commercial International Bank.

Kuwait’s premier market index and Bahrain’s indices edged 0.2 percent lower, while Oman’s index gained 1 percent.

Currencies

The dollar was lifted following the Fed’s minutes.

The dollar index .DXY, which measures the greenback against a basket of six major currencies had already bounced overnight, and was last at 98.247 against a basket of currencies from a low of 97.948.

Precious metals

Gold prices were mainly unchanged.

Spot gold was flat at $1,501.73 per ounce by 0143 GMT.

U.S. gold futures were down 0.3 percent at $1,511.50 an ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


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