Crude Oil Regains $45 a barrel On Canada Fears

Crude oil gains

While markets remain relatively calm ahead of Friday’s Non-Farm Payrolls report, after several days of losses in US stocks, which have taken “sell in May” to heart and pushed the S&P500 to three week lows.

The markets seems to have ignored weak data coming out of China and other regions, and instead focused on crude oil, which regained part of its losses this week to trade above $45 a barrel as traders fear impact of Canada wildfires on production.

It “would appear to be related to outages in production related to the wildfires in Canada – uncertainty of the extent of the outages and how long they will persist,” said Gareth Lewis-Davies, BNP Paribas energy strategist.

“Move today has to be seen in the context of the last 5 days and we have only recovered half the losses we have seen in that period.”

Reassured by the surge in oil, European stocks rose for the first time in a week as energy and commodity producers lead the rebound from the biggest four-day drop since February, while S&P500 futures rose 0.3%, and was back over 2,050.

Even with the attempt at a rally, market sentiment was mixed due to uncertainties across financial market: “There’s still a very cautious feeling to markets,” said William Hobbs, who helps oversee about $150 billion as head of investment strategy at the wealth-management unit of Barclays Plc in London. “The world is growing and is likely to grow a bit quicker as we go through the year and inflation returning and that’s simply not priced in at these levels.”

“The market has been in a consolidation phase as its previous rally, which was based on a rebound in commodity prices and signs of economic stabilization, is starting to taper off,” Audrey Goh, a strategist at Standard Chartered, told Bloomberg. “We are also going into the summer months, when the market tends to be weaker.”

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

Be the first to comment on "Crude Oil Regains $45 a barrel On Canada Fears"

Leave a comment

Your email address will not be published.