Connect with us

Markets

U.S. Stocks, Treasuries Rise After Yellen’s Speech

Published

on

U$27 Trillion Locked In Bear Markets
  • U.S. Stocks, Treasuries Rise After Yellen’s Speech

U.S. stocks and Treasuries rose while the dollar sank after Janet Yellen’s speech didn’t take the hawkish tone some expected. Oil gained as Hurricane Harvey churned toward the energy-rich Texas coast.

The S&P 500 Index had its best week in over a month as the measure held earlier gains sparked by comments from the president’s top economic adviser. The euro touched the highest in two and half years versus the greenback as traders showed signs of relief after Mario Draghi didn’t talk down the value of the currency in his Jackson Hole speech. Bloomberg’s dollar gauge fell to its lowest level since January 2015.

Earlier, stocks jumped on remarks by Gary Cohn, director of the National Economic Council, who said in an interview that he expects tax reform to pass this year and that he didn’t intend to resign in protest over the president’s reaction to riots in Charlottesville, Virginia.

Investors are keeping their eyes on strengthening Hurricane Harvey, which was upgraded to Category 3 and is set for landfall in Texas overnight Friday. Oil refiners in the Gulf Coast, home to as much as half of the nation’s refining capacity, began halting operations amid warnings of deadly floods and storm surges. It will be the strongest storm to hit the U.S. since Wilma in 2005.

“We think that the flooding impact of Hurricane Harvey could make it more destructive to U.S. crude and product supplies as well as port facilities than the market is currently assuming,” Barclays energy analyst Michael Cohen wrote in a note Friday.

Here are the main moves in markets:

Stocks

  • The S&P 500 Index rose 0.2 percent to 2,443.09 as of 4 p.m. in New York, for a weekly gain of 0.7 percent.
  • The Stoxx Europe 600 Index fell 0.1 percent, set for a third monthly loss.
  • The MSCI World Index of developed countries advanced 0.4 percent.

Currencies

  • Bloomberg Dollar Spot Index decreased 0.7 percent, touching the lowest since January 2015.
  • The euro advanced 1.1 percent to $1.1923, biggest gain since July and touched the highest level since January 2015 at $1.1941.
  • The British pound increased 0.7 percent to $1.2884, set for its first weekly gain this month.
  • The Japanese yen fell 0.3 percent to 109.25 per dollar.

Bonds

  • The yield on 10-year Treasuries fell two basis points to 2.17 percent, touching its lowest level since June during the day.
  • Britain’s 10-year yield is steady at 1.053 percent.
  • Germany’s 10-year yield gained less than one basis point to 0.38 percent.

Commodities

  • West Texas Intermediate crude climbed about 1 percent to settle at $47.87 a barrel, its fourth weekly slide in a row.
  • Gold futures rose 0.5 percent to settle at $1,297.90 an ounce.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Published

on

Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

Continue Reading

Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Published

on

Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

Continue Reading

Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Published

on

oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

Continue Reading

Trending