Brent exceeds $75.. Nikkei achieves the highest daily increase in a year
Brent exceeds $75.. Nikkei achieves the highest daily increase in a year: Oil continued its gains today,
coming close to targeting the 80 level, which can be reached very soon if current conditions continue as they are,
and major economies continue to recover.
In the following lines, Evest reviews all developments in the commodity trading market,
and the latest economic events.
Oil continues record gains
Oil prices rose today, Tuesday, with Brent crude reaching $75 a barrel for the first time since April 2019.
Investors remained optimistic about a rapid recovery in global oil demand,
as oil concerns receded, and Iranian crude returned soon.
Brent crude futures for August rose 29 cents, or 0.4%, to $75.19 a barrel at 0658 GMT,
to reduce previous losses.
It rose to $75.27 a barrel, the strongest since April 25, 2019, at the beginning of the session.
U.S. West Texas Intermediate crude
U.S. West Texas Intermediate crude for July reached $73.66 a barrel,
unchanged from the previous session.
West Texas Intermediate crude for August rose 13 cents, or 0.2%, to $73.25 a barrel.
On Monday, Brent rose 1.9 percent and West Texas Intermediate 2.8 percent.
Both benchmarks have risen over the past four weeks amid optimism about the pace of global vaccinations against the novel coronavirus and the expected recovery in summer travel.
According to experts
According to experts, market morale remains strong with the global demand outlook improving,
and the rise in Asian stock markets also helps increase risk-taking among investors.
Global stocks extended their recovery from four-week lows on Tuesday as investors focused on the outlook for economic growth in the aftermath of the pandemic, rather than worrying about the hardline stance taken by the United States Federal Reserve at last week’s monetary policy meeting.
According to Reuters
According to Reuters, BofA Global Research raised its price forecast for Brent crude for this year and next year,
noting that a tightening of oil supply and a recovery in demand could push oil briefly to $100 a barrel in 2022.
Investors are awaiting the release of weekly inventory data in the United States,
where crude inventories have fallen in the past four weeks.
Crude inventories in the United States were expected to fall for the fifth week in a row,
while distillation and gasoline output rose last week,
according to a preliminary poll conducted by Reuters on Monday.
Oil prices are expected to remain steady amid expectations that fuel demand will rise rapidly along with economic recovery in Europe and the United States.
The price gap between the two most traded oil futures in the world has narrowed to its lowest level in more than seven months, indicating that the United States oil production remains in crisis because of Covid-19 and that the market is likely to remain under-supplied.
the Iranian nuclear agreement
On the other hand, negotiations to reactivate the Iranian nuclear agreement collapsed on Sunday after hardliner Ibrahim Raissi won the country’s presidential elections.
The hardliner conservative candidate, who was declared the winner on Saturday in Iran’s presidential election,
is set to succeed the moderate Hassan Rouhani in August.
Although he descended from a political current characterized by anti-American and Western rejection,
Ibrahim Al-Raissi indicated during the election campaign that the priority is to lift the sanctions to get the country out of the deadlock.
Following his election, many diplomats trying to revive the Iranian nuclear agreement in Vienna, Austria,
said they were “getting closer” to reaching an agreement, but there were still sticking points.
For his part, Raisi on Monday supported talks between Iran and six world powers to reactivate the 2015 nuclear agreement,
but he categorically refused to meet with U.S. President Joe Biden, even if Washington lifted all sanctions.
According to analysts
According to analysts, the small likelihood of Iranian crude returning to the market due to the new hardliner president also supports the market.
Meanwhile, China issued 35.24 million tons of crude import quotas to non-governmental refineries in the second 2021 batch of allocations, down 35% from the same area last year, according to a document shared with Reuters.
According to experts, if prices are maintained until the beginning of next month, this will only increase the likelihood that OPEC will allow a wide scope for production.
Members of the Organization of Petroleum Exporting Countries (OPEC) and their allies will meet
on the first of next July, to set their production quotas as of August.
Nikkei achieves the highest increase for one session in a year
The Tokyo Stock Exchange recovered sharply on Tuesday,
benefiting from easing concerns about the possibility of faster monetary policy tightening by the US Federal Reserve,
which weighed heavily on the Japanese market the day before.
The leading Nikkei index rose by 3.12% to 28884.13 points (+873.20 points),
almost erasing its decline from the previous day (-3.3%), where it had its worst session in four months.
This is the largest one-session increase in the Nikkei index in a year.
The expanded Topix index was more dynamic (+3.16% to 1959.53 points).
European stock markets and Wall Street
European stock markets and Wall Street also ended on Monday positively,
moving ahead after a weakness resulting from the less favorable tone of the US Federal Reserve at the end of last week.
However, the Fed will continue to do everything possible to support the U.S. economy “for as long as necessary”,
according to a speech that its Chairman Jerome Powell was scheduled to deliver later Tuesday to the U.S. Congress, but published in advance.
For inflation in the United States, whose current acceleration is linked to transition factors according to the Federal Reserve Board, it should stabilize near its 2% target from 2022, as Powell reiterated in this speech.
In China, Hong Kong’s Hang Seng index fell slightly. The Shanghai and Shenzhen composite indices were in the Zone at the end of the session.