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Oil prices went negative

Oil prices went negative.. Wall Street indices following U.S. inflation data

Oil prices went negative.. Wall Street indices following U.S. inflation data

Oil prices went negative.. Wall Street indices following U.S. inflation data:

Oil started today’s early trading, Wednesday, slightly lower, despite a positive report by the American Petroleum Institute indicating a decline in U.S. inventories. 

Evest follows all this and more in the following report. 

Oil falls despite U.S. inventories decline

The price of Brent crude declined this morning, Wednesday, by 0.18 percent to $76.22. West Texas Intermediate crude fell by the U.S. $0.44 to the U.S. $74.48.

By comparison, the price of the North Sea oil barrel was $75.38 at the close on Tuesday. 

Despite the slight decline, these prices are the highest since October 2018. 

The development of the price of oil has been very strong, and oil has risen more than 50 percent so far this year,
aided by the introduction of vaccines, accelerated reopening in several places, and OPEC + good discipline.

On Tuesday, the International Energy Agency (IEA) announced that OPEC’s inability to agree on increased production would lead to tightening of the market – and higher oil prices.

Eurasia Analysis Group wrote in a note, according to TDN Direct reports: “If OPEC does not agree to increase production soon,
higher oil prices are also likely to lead to lower demand in the most cost-sensitive countries, particularly India.”

On the other hand, the API survey showed that U.S. crude oil inventories fell by 4.1 million barrels last week.

According to oilprice.com, inventories were expected to fall by 4.3 million barrels.

On the other hand, lower oil imports from China hampered prices in early trading on Wednesday.

In the first six months of this year, crude oil was imported 3% less than in the same period the previous year. This is mainly due to significantly higher prices.

Asian stocks are declining as American inflation rises

Asian stocks are declining today after data showed the largest inflation jump in the United States in 13 years and raised market expectations that the Federal Reserve would withdraw pandemic stimulus earlier than expected.

The MSCI Asia Pacific Index fell by 0.33 percent after China’s blue-chip index fell by 1 percent,
Hong Kong’s Hang Seng fell by 0.66 percent, and South Korea’s Kospi lost by 0.29 percent.

The main index in Australia rose by 0.34% after being supported by stocks of mining and energy companies.

Japan’s Nikkei index lost 0.2% today.

United States government bond yields and dollar declines were recorded in the Asian session after jumping the previous day due to inflation.

The US Department of Labor announced yesterday that the U.S. Consumer Price Index jumped by 0.9% in June.

This was above market expectations and the highest increase since June 2008.

“Against the backdrop of rising and continuing inflation in the United States, early stimulus cut appears to be the likely direction of Fed policy,” Rob Carnell told Reuters.

The New Zealand Central Bank is also considering ending its pandemic era policies after surprising markets today by announcing that it will end bond purchases next week. 

Jerome Powell had a key role

Investors will keep a close eye on Fed Chairman Jerome Powell’s congressional hearing today and tomorrow for possible indications as to whether the US Federal Reserve will take more robust steps to stem rising inflation.

Powell’s hearing comes amid attempts by President Joe Biden’s administration to lobby for fiscal stimulus to support the U.S. economy.

Democrats on the Senate Budget Committee reached yesterday an agreement on a $3.5 trillion infrastructure investment plan.

The dollars they intend to include in the budget debate later in the summer.

At the same time, in Asia, China is expected to release data on its economic growth in the second quarter, while the central bank is expected to reduce banks’ reserve requirements to support uneven economic recovery.

Mass loss for the three major Wall Street indices

On Wall Street yesterday, the major indices closed lower after inflation data were released.

The Dow Jones Industrial Index fell by 0.31 percent to 34888.79 points, Standard & Poor’s lost by 0.35 percent to 4369.21 points,
and the Nasdaq Composite closed lower by 0.38 percent to 14677.65 points.

The 30-year auction of U.S. government bonds reflects investor concerns, being placed at 2.00%,
or more than two basis points above pre-auction levels.

U.S. bond yields fell today – after yesterday’s jump.

A jump in JPMorgan and Goldman Sachs profits

As for U.S. corporate results, the season opened with second-quarter accounts of Goldman Sachs and JPMorgan,
which showed lower trading revenue but a higher than expected jump in profits.

On the other hand, Pepsi has had the fastest sales growth in at least a decade.

While there are still concerns about the spread of the delta variant of Covid,
which threatens to slow the recovery of the global economy.

The dollar index is falling.. The yen rises against the U.S. currency

In the foreign exchange markets, the yen rose, with the dollar falling by 0.13% against the Japanese currency to 110.47.

The euro rose by 0.08% to 1.1783 after the United States currency recorded the highest level in three months against the euro.

The dollar index, which measures the dollar’s performance against a basket of six other major currencies,
fell to 92747 after rising to 92832, below last week’s 92,844 level for the first time since April 5.

The New Zealand dollar rose by 0.85% after the country’s central bank announced it would end asset purchases.

 

Oil prices went negative.. Wall Street indices following U.S. inflation data

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