Oil continues to rise and a new surge on European exchanges

Oil continues to rise and a new surge on European exchanges: U.S. oil inventories retreated dramatically for the fifth week in a row,
paving the way for oil prices to resume the bullish wave, and continued profit.

Evest follows what happened in the commodity trading market through the following report.

US oil inventories decline for the fifth week in a row supports oil prices

Oil prices rose today, Thursday, against the backdrop of declining inventories according to the U.S. Energy Information Administration,
as well as growing doubts about a future nuclear deal with Iran.

The price of London Futures Exchange Brent crude futures in August reached $75.29 a barrel,
$0.13 (0.13%) higher than the closing price of the previous session.

The price of West Texas Intermediate crude futures in August in electronic trading on the New York Mercantile Exchange (NYSE)
increased by $0.11 (0.15%) to $73.19 a barrel. 

The initial benchmark trading ended at $75.19 and $73.08 respectively.

U.S. Department of Energy

The U.S. Department of Energy released a report the day before on reducing the country’s oil reserves for the fifth week in a row, the longest decline since January. 

U.S. oil inventories for the week ending June 18 fell by 7.6 million barrels to 459.1 million barrels, the lowest level since March 2020. 

Gasoline inventories decreased by 2.9 million barrels and distillation outputs increased by 1.8 million barrels.

The nuclear agreement with Iran

According to experts, oil prices rose against the backdrop of U.S. stock data.

They confirmed the strong outlook for fuel demand growth in the second half of the current year, supported by the resumption of land and air transportation.

There are also gaps in the negotiations on the 2015 nuclear agreement with Iran.

Iran said on June 23 that the United States had agreed to lift all sanctions on Iranian oil and shipping. 

However, Washington said it would “not agree until everything is agreed” in talks to renew the 2015 nuclear agreement with Iran.

The Organization of Petroleum Exporting Countries (OPEC) and its allies are discussing further increases in oil production
and supply as of August 1st at the July 1st meeting.

However, two sources in OPEC + told Reuters that no decision has yet been taken on the matter.

Crude oil prices

Crude oil prices yesterday struck new highs for this year (and for several years),
but did not maintain a significant rise and just yesterday’s session ended slightly positively. 

However, it should be noted that, for the first time since 2018, West Texas Intermediate crude prices reached the U.S. $74 a barrel,
while Brent crude prices rose to approximately U.S. $76 a barrel.

The demand side of the crude oil market has been favored by the information in the U.S. crude oil inventories reports. 

the American Petroleum Institute (API)

The first report appeared on Tuesday and was published by the American Petroleum Institute (API).

It stated that US crude oil stocks fell by 7.2 million barrels last week.

It was twice higher than expected at the beginning of this week: 3.5 million barrels and the decline was expected.

In turn, this reading was confirmed yesterday by the U.S. Department of Energy,
which announced that U.S. crude oil inventories fell last week by 7.61 million barrels,
even more than previously estimated by the American Petroleum Institute. 

Another positive note in this report is the information on the reduction of gasoline inventories by 2.93 million barrels,
with an expected increase of 700 thousand barrels. 

Distillates inventories rose only by 1.75 million barrels, while they were expected to increase by 1 million barrels less.

Most importantly for investors, the fact that crude oil inventories in the United States are already beginning to decline at a faster pace is crucial. 

This result is in line with expectations that the summer travel season will contribute to increased fuel demand,
which in turn will support higher crude oil prices on the world market, especially those on the U.S. market.

Good start for European exchanges

The European stock markets began Thursday’s session at a rising edge pending the Bank of England meeting – which will announce its periodic decision on interest rates – the IFO business survey in Germany, and final GDP data for the first quarter in the United States.

In Spain, the National Institute of Statistics confirmed that the Spanish economy rebounded in the first quarter of 2021,
compared to the last quarter of 2020 in which it remained stagnant, although it reduced deflation to 0.4%, less than progress in April.

Minutes after 07.00 GMT, the German stock market was the highest at 0.59%; followed by Paris at 0.48%; Madrid at 0.47%, and London at 0.20%.

The Euro Stoxx50 index, which includes the main European companies, rose by 0.52%.

The mixed performance of Chinese indices.. Japan is stable

The Tokyo Stock Exchange closed a dull session on Thursday, suffering profit-taking in the absence of incentives in the near future of the market,
pending a major inflation index in the United States on Friday.

The Nikkei ended in almost perfect balance at 28,875.23 points, while the expanded Topix index lost 0.1% to 1947.10 points.

On Wall Street, which set the pace for the next day’s meeting in Tokyo, the Nasdaq index rose slightly Wednesday to a new record,
but the Standard & Poor’s and Dow Jones’ indicators were rather weak.

Among other things, investors were preparing to see the figures for the U.S. Consumer Price Index in May in the United States,
with the data being used as a benchmark for the U.S. Federal Reserve to assess the pace of inflation in the country.

In China, Hong Kong’s Hang Seng Index rose slightly, while the Shanghai and Shenzhen composite indices fell at the end of the session.