The Federal Reserve assures investors.. Oil continues to rise

The Federal Reserve assures investors.. Oil continues to rise: Oil continued to rise today,
with a number of factors supporting it to try to reach new highs. 

Evest follows developments in the commodity trading markets scene and relays them to you in the following lines.

Several factors supporting oil prices recovery

Oil prices rose on Wednesday, owing to the falling U.S. inventories and the steady economic recovery in countries – the main consumers of raw materials.

The price of London Futures Exchange Brent crude futures in August reached $75.27 a barrel, $0.46 (0.61%) higher than the closing price of the previous session.

The price of West Texas Intermediate crude futures in July in electronic trading on the New York Mercantile Exchange (NYSE) increased by $0.35 (0.48%) to $73.2 per barrel. 

The initial benchmark trading ended at $74.81 and $72.85 respectively.

The American Petroleum Institute said the day before that U.S. oil inventories had declined 7.2 million barrels in the week ending June 18, with a projected decrease of 3.625 million barrels. 

Meanwhile, the country’s gasoline reserves increased by 959 thousand barrels, and distillation output by 992 thousand barrels.

The American Petroleum Institute said reserves at a major storage hub in Cushing had declined last week, while the gasoline sector had increased.

For its part, the Energy Information Administration is expected to provide data on Wednesday, reducing reserves by 3.5 million barrels, according to a Bloomberg study. 

Demand for fuel is rising due to major markets, including the United States and China, which continued to recover after COVID-19.

According to media reports

According to media reports, OPEC + members have been discussing a gradual increase in oil production since August.

However, no decision has yet been taken on the exact size, and the same meeting will take place on 1 July.

Meanwhile, Iran has said that nuclear talks with world powers may continue after August and that a possible increase in fuel supplies will be postponed.

The nuclear agreement with Iran may fail, encouraging traders to purchase oil futures.

Ibrahim Raissi, who was elected President of Iran on June 18, confirmed at the first press conference that he was not prepared to negotiate with the United States until it fulfilled its commitments.

The rise in oil prices

The rise in oil prices was, therefore, supported by the suspension of negotiations on the nuclear deal between the United States and Iran,
and the increase in demand for oil, as well as the weakness of the U.S. Dollar, and by signs of a new fall in U.S. Stocks, which strengthening the bullish outlook.

Meanwhile, demand recovery in Asia remains uneven, with improvements in India and Thailand, for example, to offset poor performance elsewhere.

On the other hand, markets are awaiting the decision to exit next week’s meeting on post-July production policy
for the Organization of Petroleum Exporting Countries (OPEC) and the OPEC + Group,
which is made up of some non-OPEC producing countries.

At its meeting on April 1, the group decided to gradually increase daily oil production for the months of May, June, and July.

At the OPEC+ group meeting to be held on July 1, production is expected to continue to increase due to the recovery in oil demand and prices.

The Japanese stock exchange is stable

The Tokyo Stock Exchange temporarily stopped on Wednesday, recovering from a roller coaster in the previous two sessions,
after panicking on Monday and recovering sharply the next day after reassuring about U.S. monetary policy.

The leading Nikkei index finished close to balance (-0.03% to 28874.89 points) after gaining more than 3%
the day before and reversed almost all of its losses on Monday.

The broad Topix index fell 0.53 percent to 1949.14 points.

China’s Shanghai Composite Index rose 0.2%, and the Hong Kong Hang Seng Index rose 1.8%.

United States stock indices rise and reserve meeting results

U.S. stock indexes rose 0.2-0.8٪ on Tuesday, while the Nasdaq closed 0.8 percent higher, trading at a new record.

Investors have evaluated the statements of U.S. Federal Reserve System Chairman Jerome Powell and other representatives of the regulator.

U.S. Federal Reserve Chairman Jerome Powell’s congressional hearing on Tuesday came as no surprise, as his speech,
which eased financial market concerns, was released in advance the day before.

Mr. Powell calmed financial markets by repeating that the current sharp acceleration in inflation in the United States
was temporary according to the Federal Reserve and that the latter would continue to support the recovery
of the American economy through appropriate monetary policy as well. 

U.S. Federal Reserve Chairman

U.S. Federal Reserve Chairman, Jerome Powell, brings good news to investors.

The day before, he had confirmed the view that inflationary pressures would be temporary even after the marked price hike in recent months. 

Adding: that the Fed would wait patiently and monitor the situation before raising the cost of borrowing. 

The New York Fed Bank President, John Williams, Federal Reserve Bank of New York President John Williams added positively to the market,
noting that discussions about price hikes are still “far ahead.”

Speaking to the U.S. Congress on Tuesday, Powell reiterated his view that the country’s inflation acceleration is likely to be temporary,
indicating that the U.S. Central Bank will continue to support the economy.

In a speech Tuesday before the House Coronavirus Subcommittee, Powell said the U.S. economy is showing steady improvement.

U.S. employment growth will rise

Powell said U.S. employment growth will rise in the coming months and inflationary pressures will decline
as the U.S. economy continues to recover from the COVID-19 pandemic.

He said that at the height of the crisis, the Fed’s lending programs had “saved more than $2 trillion in funding,”
which had helped reduce job losses in companies, non-profit organizations, and local governments.

The New York Federal Reserve Bank President, John Williams, New York Federal Reserve Bank President John Williams

Oil stocks have fallen by more than 7 million barrels and prices are falling

Oil stocks have fallen by more than 7 million barrels and prices are falling: The American Petroleum Institute (API) announced yesterday Tuesday, June 22,
The United States crude oil inventories declined by 7.199 million barrels for the week ending Friday Analysts
had predicted a much lower decline of 3.942 million barrels during the week.

For the previous week, (API) recorded a decline in crude oil inventories of 8.537 million barrels after analysts predicted a decline of 3.290.

Crude oil inventories have also declined by more than 29 million barrels since the beginning of 2021,
According to data from the American Petroleum Institute, but it’s still up 27 million barrels since January 2020.

API reported an increase in gasoline stocks

API reported an increase in gasoline stocks of 959,000 barrels for the week ending on June 18.

In addition to 2.852 million barrels in the previous week.

After analysts forecast an increase of 833,000 barrels during the week.

Inventories of distilleries witnessed an increase in inventories this week reaching 992 1,000 barrels during the week,
in addition to the last week’s increase which reached 1.956 million barrels. 

This week, Cushing stocks also fell by 2.550 million barrels.

Change in oil prices this week

Oil prices fell on Tuesday after the significant gains made on Monday.

In the middle of the day and before the data was released, WTI witnessed a drop of $0.58 or (-0.79%) and was trading at $73.08,
up about $1 per barrel on the week. As for the benchmark Brent crude,
it was trading on the day at $74.90, an increase of 0.80 or (+0.80) dollars in the week.

After the data was released, around midday, WTI was trading at $73.08 a barrel while Brent crude was trading at $74.86 a barrel.

Weekly oil production rates

Concurrently with a further decline in U.S. crude oil inventories this week,
U.S. oil production recovered to an average of 11.2 million barrels per day for the week ending on June 11,
According to the latest EIA data, this represents 200,000 barrels per day compared to the previous week.

 

Venezuela claims the ability to quadruple its oil production at the end of the year

Oil Minister, Tarek El Aissami, in a recent Bloomberg interview,
stated that Venezuela is investing in recovery in crude oil production
and it is planning to increase its production to four times by the end of the year, to 1.5 million barrels per day.

El Aissami added that without any external financing or loans and only with their own money they have been able to increase investment
enough to begin the recovery gradually

Venezuela, which has the largest reserves of crude oil in the world, alleged that it will increase to four times of its production of crude oil,
and will also limit the lines of communication at all gas stations in the country. This is despite the sanctions that the country has been subjected to,
as well as the severe crisis that the world has been exposed to due to the Coronavirus outbreak and the drop in oil prices last year.

El Aissami said crude oil production in Venezuela now has exceeded 700,000 barrels per day,
from nearly 400,000 barrels per day in the summer of last year when production fell in the wake of the pandemic and oil prices fell.

Secondary sources from the Organization of Petroleum Exporting Countries (OPEC) indicate that Venezuela’s oil production in May amounted
to 531,000 barrels per day, an increase of 45,000 barrels per day compared to April,
according to the latest monthly oil market report issued by OPEC.

Venezuela reported its oil production to OPEC, which amounted to 582,000 barrels per day last month,
a daily increase of 130,000 barrels from its April production level.

Bloomberg

Francisco Monaldi, an expert on Venezuela’s oil industry at Rice University,
told Bloomberg that the increase in oil production to 1.5 million barrels per day by the end of 2021
might be an impossible goal, In the medium term, this will not even be reasonable.

Production capacity has been down since 2014 and there have been no operating oil rigs in Venezuela for a year.

Maduro said in an interview last week with Bloomberg that he had been waiting for the Biden administration to negotiate a deal that would ease US sanctions.

But a US State Department spokesman said that if Maduro expects sanctions to be lifted, he should do more to restore some democracy in the country.

China prepares to reduce oil imports

China has reduced 35% of the crude oil import quotas for independent refineries in the second batch of oil purchase licenses this year,
indicating that China will import much smaller quantities in the second half of the year than last year and in recent months.

Since 2015, when China began allowing private refineries to import crude oil, the authorities have regulated the quotas that each refinery can buy.

Independent refineries represent about a quarter of China’s refining capacity.

Unlike independent refineries which issue semi-annual quotas for crude oil imports, government oil refineries’ imports are not quotas.

Amid an oversupply of refined products and low refining margins,
this year the Chinese government launched a crackdown on commercial practices at independent refineries.

China continues to increase oversight

China continues to increase oversight of refineries in its attempts to crack down on the illicit fuel trade,
fill loopholes that some companies use to evade fuel tax evasion, and curb oversupply of fuel, part of which results from tax evasion.

In May, the Chinese authorities said they would impose a consumption tax on imported LCO oil, mixed aromatics,
and diluted bitumen starting on June 12.

In April, China ramped up pressure on independent refineries to expose illegal tax practices and check whether
substandard facilities were closed or still operating, Bloomberg reported, citing sources familiar with the plans.

SCI99 said in a report reported by Bloomberg that the reduction in quotas for the second batch of 2021 indicates
that China intends to reform practices in the private refining sector.

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.

 

Oil starts the week at a rising edge.. Collective declines on Asian indices

Oil starts the week at a rising edge .. Collective declines on Asian indices: Iran announced yesterday the victory of Ibrahim Raisi,
who is known for being more hardliner than the current president, Hassan Rouhani,
in the US presidential elections, supporting oil markets, which expect Iran – US negotiations on lifting sanctions to falter,
meaning Iranian oil will not return to the market soon. 

Evest follows all this and more in the following lines.

Oil continues to rise with the support of Raisi’s victory in the United States elections.

Oil prices started the week with moderate increases today, Monday, against the backdrop of the Iranian presidential elections,
and US-Iran negotiations on the nuclear deal have stalled.

Oil support increased as talks between world powers and Iran, impeding the recovery of Iranian oil exports,
and a strong economic recovery in the northern hemisphere could continue to fuel energy demand.

Iranian production

Another round of fruitless nuclear talks between Iran and world powers led to higher oil prices as concerns over additional Iranian production waned. 

On the other hand, the slight decline in the U.S. dollar index eased pressure on commodity prices. 

Iran demands that the United States lift sanctions first, and Washington first demands that Tehran reduce its nuclear program in line with the agreement.

But negotiators are talking about progress in talks to restore the landmark 2015 agreement to halt the development of Iran’s nuclear program.

The United States abandoned this speech in 2018 under Donald Trump’s reign.

In April, the United Kingdom, China, Germany, France, Russia, and Iran began talks with the European Union and the indirect participation of
new U.S. President Joe Biden’s administration to return to the 2015 agreement.

Renewing this agreement will allow the lifting of economic sanctions on Iran and the flow of Iranian oil markets

Ibrahim Raisi Iran’s new president

Iran’s election of the conservative leader Ibrahim Raisi as President could complicate prospects for future nuclear talks.

Raisi was sanctioned by the U.S. government prior to his election as Iran’s president
and is known to be a hardliner on foreign policy.

This could upgrade the overall standard of both Washington and Tehran in reaching a consensus on lifting economic sanctions and returning to the 2015 nuclear agreement.

The price of a barrel of Brent North Sea crude reached $73.69 that morning.

That was 18 cents more than it was on Friday.

barrel of the U.S

The price of a barrel of the U.S. diversified West Texas Intermediate crude rose 25 cents to $ 71.89.

The rise in oil prices was triggered by the support of the election results in Iran and the negotiations which continue to be unsuccessful on the Iranian nuclear program. 

The results of Iran’s presidential elections are widely anticipated; the new president, Ibrahim Raissi,
is a very conservative cleric backed by Iranian hardliners.

In the oil market, it is expected that the election of Resi will not at least simplify nuclear negotiations, or even make them more difficult.

This makes the scenario of increased oil supplies from Iran less likely. 

This is due to the US sanctions currently in place, which will probably be eased only if a negotiated solution is found.

energy demand remains strong

The outlook for energy demand remains strong as economic recovery gains momentum in the United States and Europe,
although parts of Asia continue to suffer from the COVID-19 pandemic. 

In the past two weeks, the number of air passengers in the United States has exceeded 2 million, confirming strong fuel demand.

The recent decline in United States crude oil inventories has also reinforced these expectations.

On the other side of the Pacific, Japan lifted a state of emergency this week in Tokyo, Osaka,
and many other provinces as the country prepares for the upcoming Olympics.

coronavirus infection

However, the economic hub in southern China, Guangdong, extended travel restrictions after new cases
of coronavirus infection were reported over the weekend.

Traders may also focus on the strength of the US dollar, which may exert downward pressure
on commodity prices and limit the likelihood of higher oil prices. 

This can be attributed to the easing of concerns after the Federal Open Market Commission meeting last week.

Federal Reserve officials seemed increasingly concerned about inflationary pressures,
with some seeing a hike in interest rates as early as the end of 2022 

Therefore, market participants will keep a close eye on Friday’s basic personal consumption price index data.

Technically, West Texas Intermediate crude broke psychological resistance at 70.00, opening the door to further potential growth. 

Collective fall of Asian indices

U.S. stock futures and global markets declined on Monday, as investors continued to withdraw their bets on strong growth and inflation.

Market movements in the past few days show a partial reflection of bets on a recovery in the economy (deflation trading) and rising inflation.

Last week, the U.S. Federal Reserve indicated that it could raise interest rates twice in 2023,
earlier than previously expected.

The Fed’s ability to tighten monetary policy sooner than expected pushed the Dow Jones industrial index
to its worst week in almost eight months.

Dow Jones index futures

This morning, Dow Jones index futures declined by more than 100 points, while Standard & Poor’s declined by 0.5%.

In Asia, Japan’s Nikkei index declined by more than 1000 points or 3.8%,
Australia’s ASX 200 index declined by 1.6%,
Hong Kong’s Hang Seng index declined by more than 1%,
and South Korea’s Kospi index declined by more than 1.6%. 

In the meantime, China’s Shanghai Composite index fell by only 0.1%.

US 10-year government bond yields fell from 1.44% to 1.39%.

This is the lowest yield since the end of February 2021.

It’s known that when bond yields fall, bond prices will rise.

Oil continues to rise for the fourth week in a row

Oil continues to rise for the fourth week in a row: Crude oil prices continued to rise last week,
in the week ending June 18, oil prices were on track to rise for the fourth week after OPEC expected limited growth in the U.S.

oil production this year despite the price hike.

An OPEC source told Reuters that OPEC officials get expectations of American production from industry experts.

This will give producer groups more power to manage the market before the potential rise in shale oil production in 2022.

Oil performance in a week

On Friday, the price of Brent crude futures for August 2021 rose by 0.6% and closed at the U.S. $73.51 a barrel.

Similarly, the West Texas Intermediate crude price for delivery in July 2021 also closed by 0.8% to the U.S. $71.64 a barrel.

Both benchmark oil prices posted weekly gains of about 1.1%.

“The oil market is rising as OPEC is skeptical that increasing U.S. oil production will be enough to change its price
support plans,” said Phil Flynn, chief analyst at Price Futures Group in Chicago.

Brent crude settled at its highest price last Wednesday since April 2019 and West Texas Intermediate closed at its highest level since October 2018.

Despite these gains, there are continuing concerns about the pandemic and the rising US dollar.

This makes the price of oil more expensive than other currencies.

U.S. production

Reuters sources said officials from the OPEC Economic Committee board and external sponsors
attended a meeting on Tuesday focused on U.S. production.

OPEC is hearing more about the 2021 and 2022 prospects at separate meetings on Thursday.

While there is general agreement on limited U.S. supply growth this year, industry sources said
the 2022 forecast ranges from a growth of 500 southland to 1.3 million barrels per day.

“The general feeling about shale oil is that it will return as prices rise,
said a source at one of the companies providing forecasts for OPEC.

The rise in oil prices led to a severe decline in U.S. energy companies.

The number of oil rigs, an early indicator of future production, rose for the eighth week in a row to 373,
the highest level since April 2020, according to energy services company Baker Hughes Co.

Iranian nuclear agreement

On Thursday, Iran’s chief negotiator indicated that the deal is imminent in talks between Tehran
and Washington on reviving the 2015 Iranian nuclear agreement, adding to the pressure on prices.

driving US crude oil prices higher

This dynamic is driving US crude oil prices higher.

It even raises the possibility that West Texas Intermediate could reach parity with global benchmark Brent, for the first time in five years.

At least 18 months ago, the oil market underwent a transformation during the pandemic.

The move has reportedly had an impact on US exports.

With no breach of the rules of capital discipline and the reopening of the world’s largest economy
to the West, U.S. refineries are calling for more barrels to be purchased locally, rather than allowed to export.

According to some analysts, “it is a function of accelerating U.S. demand.”

The West Texas Intermediate crude has an external attempt at parity with Brent, but not the base case. 

The market recognizes that West Texas Intermediate crude needs to raise its price to reduce exports and encourage imports,
otherwise the regional balance will become very tight in the summer.

Refineries across the United States

Refineries across the United States are operating at their highest levels since before the pandemic as demand that resulted from reopening most of the economy returns.

Midwest fuel plants, which rely largely on Cushing, are processing crude to their highest levels since September 2019,
adding support to West Texas Intermediate crude.

Capital discipline from the shale array along with increased domestic demand helped ease stocks in Cushing,
Oklahoma, the delivery point for NYMEX futures.

Seasonal shares in Cushing are at their lowest level in three years.

The result is an increasing lag in the United States oil futures market, where spot oil prices are more expensive than futures.

This motivates traders to sell their oil now rather than keeping it for later.

Economic recovery supports prices again

The prospects for global economic recovery continue to strengthen, increasing expectations that the process of improving
oil consumption will accelerate, supporting oil prices, ending the trading week with a strong rise.

Reports from OPEC, EIA, and VPI released last week showed that demand for crude oil will increase sharply in the period ahead,
and is likely to explode when production, tourism, and aviation activities return strongly.

tourism activities will explode

It is expected that the demand for fuel consumption will continue to increase as the peak heat season and tourism season
in European countries and the United States approaches.

According to experts, tourism activities will explode because the demand for tourism and the budget in tourism
spending has been constrained for too long by the pandemic.

Recent positive economic data from production and consumption activities have also contributed to strengthening and increasing
expectations of improving global demand for fuel consumption, thereby continuing to support the world economy and rising oil prices.

Gasoline prices

Gasoline prices were also boosted by investors who believed that the Fed would continue to maintain the current lax monetary policy
and that governments and central banks of states would be able to take fiscal measures to support it.

With the recent developments in the crude oil market, many organizations and experts commented on the potential for demand
to exceed supply in the near future before establishing a balance in early 2022 when sources are added as new supplies to the market.

according to the European Union

On the other hand, according to the European Union, the prospects for oil supplies from Iran appear bleak when nuclear negotiations
between the United States, Iran and the relevant parties are completely “tense.”

In addition, OPEC + ‘s strict commitment to the production plan is also an important factor in rising oil prices.

Oil losses and collective declines in Europe and Japan

Oil losses and collective declines in Europe and Japan: Oil was unable to continue the upswing, crashing into the press conference after the Fed meeting,
which had a positive impact on the dollar, and negatively on oil in the commodity trading market.

In the following lines, Evest will show you all this and more.

Oil bucks this trend of gains and declines due to the strength of the dollar

Benchmark oil prices fell today, Thursday, against the backdrop of a rise in the U.S. dollar
after the two-day meeting of the United States Federal Reserve (FRS).

Oil prices on the New York Fuel Exchange are falling in response to signals from the United States Federal Reserve
that they are moving towards tightening monetary policy, according to experts.

The West Texas Intermediate barrel

The West Texas Intermediate barrel for July delivery on the New York Fuel Exchange
is estimated at $71.94, down 0.29 per cent.

While the cost of Brent crude for August delivery on the European Fuel Exchange in London is $74.15 a barrel, down 0.32%.

On Wednesday, the Federal Reserve kept the major interest rate in the United States within a range of 0-0.25٪.

Fed projections show that 7 Committee members expect interest rate hikes.

In 2022, 13 out of 18 members of the Federal Open Market Commission expect at least one rate hike through 2023.

In its statement, the Fed indicated that it aims to “maximize employment and inflation by 2% over the long term.”

Federal Reserve Chairman Jerome Powell

Federal Reserve Chairman Jerome Powell indicated that he would be able to say more about the timing
of the asset procurement program cutback when he sees more data, and added that inflation would remain high in the coming period.

Following these comments, the US dollar rose, making U.S. dollar-priced commodities, including crude oil, less attractive to investors in other currencies.

U.S. crude oil inventories

In the meantime, U.S. crude oil inventories declined last week by 7.35 million barrels, or 1.6%.

Gasoline inventories increased by 1.95 million barrels during that period, or 0.8 per cent, to 243 million barrels,
and distilled fuel reserves, including heating oil, fell by 1.02 million barrels, or 0.7 per cent, to 136.2 million barrels, according to the Ministry of Energy.

Analysts say oil markets continue to show signs of strength as the COVID-19 pandemic begins to recede.

Potential Fed actions are likely to have a greater impact on commodities other than oil.

Oil prices have risen this year and West Texas Intermediate crude reached its highest level since 2018 earlier this week,
as the spread of coronavirus vaccines paves the way for lifting restrictions imposed in many countries while fighting the pandemic.

What happened in Jerome Powell’s speech?

What happened in Jerome Powell’s speech?

Jerome Powell, Chairman of the Federal Reserve Board, showed tightening in his speech.

This was not included in the statement but was stated in the subsequent press conference.

Powell indicated, for the first time, that if the economic recovery continued to be favorable,
the discussion would be opened at future meetings, but they would give advance notice.

The market interprets that the tapering will be announced at the August meeting and will come into effect in January.

The Federal Reserve

The Federal Reserve keeps interest rates between 0% and 0.25% and advocates accommodative policy.

It also conducted an upward revision of US GDP + 0.5%, up to 7% in 2021,
keeping 2022 unchanged while in terms of core inflation 2021 + 0.8%, up to 3%.

Janet Yellen is scheduled to appear today in a talk at 4:00 p.m.

Markets are also looking forward to the Eurogroup meeting, which will start at 12:00.

Yesterday, in a meeting between Joe Biden and Vladimir Putin, it was agreed on the return of the ambassadors of the two countries,
at a time of tension between the two forces.

The impact of the speech on Wall Street trading yesterday

Declines were seen on Wall Street, the Dow Jones index lost 0.77% to 34033.67 points, the Standard & Poor’s 500 indexes fell by 0.54% to 4223.70 points,
and the Nasdaq index declined by 0.24% to 14039.68 points.

The most affected sectors are basic materials, utilities, and defense consumption.

Nikkei declines by profit-making operations

The Tokyo Stock Exchange closed lower on Thursday, with profits dominated by the U.S. Federal Reserve raising inflation expectations in the United States,
which, however, do not intend to raise prices before 2023.

The main Nikkei index lost 0.93% to 29018.33 points, and the extended Topix index closed down 0.62% to 1963.57 points.

However, the yen’s decline against the dollar, a favorable exchange rate movement for Japanese exporting stocks, limited the damage somewhat.

While raising its inflation forecast, the Federal Reserve reiterated on Wednesday
that the acceleration of price hikes in the United States was temporary.

The majority of its members now believe that major interest rates should be raised twice during 2023.

Japan

In Japan, the government would announce later on Thursday that a health emergency
would be lifted as planned after Sunday in several departments,
including Tokyo, which will host the Olympic Games in just over a month.

However, restrictions on bars and restaurants will continue to be applied,
with the Minister responsible for managing the health crisis warning against opening them completely.

In Hong Kong, the Hang Seng Index was near equilibrium, rising by 0.09%,
the Shanghai Composite Index closed slightly higher and the Shenzhen Index also rebounded after falling the previous day.

Collective loss in European markets

In Europe, the major indicators are down, with Ibex down 0.35%, Dax down 0.38%, and Eurostoxx down 0.48%. 

 

Oil losses and collective declines

Oil continues gains China and Japan markets losses

Oil continues gains China and Japan markets losses: Oil continues to perform strongly positively;
despite the challenges, it has been facing for more than a year and a half due to the COVID-19 virus.

Oil is trying to take advantage of the recent demand recovery from the USA and Europe,
where restrictions are gradually being lifted, increasing demand for oil.

Evest follows all this and more, through the next report.

Oil continues to gain as U.S. inventories fall

Oil prices have accelerated their upward trend, amid better expectations of demand,
which are expected to continue to rise as summer arrives and vaccinations increase, especially in the United States and Europe.

World crude oil market prices also moved close to multi-year highs on Wednesday morning,
with Brent crude rising for the fifth day in a row due to lower inventories and increased demand.

Analysts said prices will continue to rise, after a nearly 50 percent rebound so far this year.

Wednesday morning

On Wednesday morning, August futures for North Sea Brent crude rose by 58 cents, up 0.78 percent, at $74.57.

While, West Texas Intermediate crude futures rose by 0.75% at 54 cents, to $72.66 a barrel.

Brent crude price anchored around the daily maximum of $74.72, the strongest level since April 2019.

West Texas Intermediate crude reached $72.82, the highest level ever since October 2018.

West Texas Intermediate crude closed yesterday at $72.25 a barrel, an increase of 1.93 percent,
while London Brent crude price rose by 1.77 percent to $74.15 a barrel.

Glencore plc and Vitol Grou

Glencore plc and Vitol Group said during the Financial Times Global Commodities Summit that they are seeing higher gains in oil.

Jeremy Weir, CEO of Trafigura, added that there is a  risk of crude oil prices will reach $100 a barrel due to a lack of supply
amid insufficient investment in the sector, according to Bloomberg.

During the session, West Texas Intermediate’s crude hit a new annual high of $72.31 a barrel,
the highest level ever since October 2018, while Brent’s crude reached a maximum of $74.19 the highest level ever since April 26, 2019.

“The price increase is also due to the expectation that Iranian oil will not return to the market in the short term,
as talks to reach a new nuclear agreement have not progressed,” said Gabriella Seiler, Director of Economic and Financial Analysis.

the weekly report from the United States Energy Information Administration (EIA)

On the other hand, investors are expecting the weekly report from the United States Energy Information Administration (EIA) to be released today Wednesday,
with the market expecting a 2-million-barrel decline in U.S. inventories.

Everyone expects higher oil prices, and demand for crude oil is expected to jump significantly and return to pre-coronavirus
levels in the second half of next year as the US, European and Chinese economies recover, says Edward Moya of the US website Oanada.

The American Petroleum Institute said, on Tuesday, that the level of commercial oil reserves fell by 8.5 million barrels in the week ending June 11.

The United States Government’s Energy Information Office released its data on Wednesday,
with analysts expecting a 3.3 million-barrel drop after a 5.2 million-barrel decline last week.

The International Energy Agency (IEA) predicted in its June oil market report that by the end of next year,
global oil demand could rise by 3.1 million barrels to 100.6 million barrels, returning to pre-pandemic levels.

Leaders of major oil trading companies

Leaders of major oil trading companies also expect demand to reach pre-pandemic
levels in the second half of 2022 and oil prices to remain above $70 this year.

Analysts at the U.S. investment bank Goldman Sachs indicated last week that they expect the price of Brent crude to reach $80 a barrel in the summer
as COVID-19 vaccination campaigns curb the pandemic and thus boost global economic performance.

A collective rise in European exchanges

The exchange markets in Europe rose with the opening of the meeting today, amid shadows of optimism.

Among the major European markets, the German DAX index rose 0.04%, the British FTSE index rose 0.51%,
the French CAC 40 index rose 0.19%, and the Spanish IBEX 35 index rose 0.02%.

The decline of Chinese and Japanese exchanges

The Tokyo Stock Exchange ended a lukewarm session on Wednesday, commenting on ads and comments from the United States Federal Reserve (Fed) at the end of its meeting later in the day.

The Nikkei index ended down 0.51% to 29291.01 points, while the extended Topix index closed steady (+ 0.02% to 1،975.86 points).

According to experts, the Nikkei index fell due to profit-making with market players in a wait-and-see mode against the Fed.

The focus will be on the Fed’s message and on the slightest evidence it can provide on the gradual reduction of its support for the American economy,
summarized in the note by Robert Carnell, Head of Research for Asia and the Pacific at ING.

On the other hand, Chinese markets fell, in Hong Kong, the Hang Seng index fell by 0.59%,
the Shanghai Composite fell by more than 1% at the close and the Shenzhen Index fell by 2.3%.

On Wednesday, the Chinese authorities acknowledged a minor nuclear accident at the Taishan Nuclear Power Plant
in the south of the country, while ruling out any danger.

 

Oil continues gains

A massive decline in oil inventories and continued increase in prices

A massive decline in oil inventories and continued increase in prices: Yesterday, Tuesday, June 15, 2021,
the American Petroleum Institute announced that crude oil inventories decreased by 8.537 million barrels for the week ending on June 11.

Analysts had expected a much smaller decline of 3.290 million barrels during the week.

As for the previous week, the institute recorded a decline in oil stocks, which amounted to 2.108 million barrels,
after analysts had expected a decline of 2.036 million barrels.

Crude oil stocks have fallen by more than 22 million barrels since the beginning of 2021,
but are still rising by 34 million barrels since January 2020.

The API reported an increase in gasoline inventories

The API reported an increase in gasoline inventories of 2.852 million barrels for the week ending June 11
in addition to a 2.405 million barrel increase in the previous week.

Analysts had expected a decline of 614,000 barrels this week.

Distillate inventories witnessed an increase in inventories this week,
which amounted to 1.956 million barrels during the week,
in addition to the increase of 3.752 million barrels last week. 

Cushing inventories fell this week by 1.526 million barrels.

Weekly oil prices

West Texas Intermediate (WTI) and Brent crude prices rose again during Tuesday
as the market digested new demand expectations that the oil market
may return to its brilliance in the second half of this year,
despite previous expectations that oil demand may take years to recover to reach levels before the pandemic.

In the middle of the day and before the data was released,
the price of West Texas Intermediate crude rose $1.34 (+1.89%)
and was trading at $72.22, an increase of $2 per barrel in the week.

The price of Brent crude rose $1.24 a barrel (+1.70%) and was trading at $74.10 a barrel.

After the data was released, WTI was trading for $72.27 while Brent crude was trading for $74.14 a barrel.

Oil production rates this week

With crude inventories down again this week, US oil production increased to an average of 11.0 million barrels per day for the week ending June 4,
according to data from the Energy Information Administration.

This represents an increase of 200,000 barrels per day compared to the previous week.

Saudi Arabia raises its daily oil production to 10 million barrels

Saudi Arabia is expected to raise its crude oil production to 10 million barrels per day by the end of 2021,
a daily increase of 1.5 million barrels this month from May, in response to the high global demand for oil.

Last May, Saudi Arabia pumped approximately 8.5 million barrels per day, after increasing its production by 345,000 barrels per day,
starting in April, to gradually ease the cuts according to the OPEC agreement,
according to what OPEC showed last week in its monthly report.

The International Monetary Fund expects the Saudi economy to grow by 2.9% in 2021.

The International Monetary Fund also stated in its latest regional outlook for the Middle East and North Africa in April that higher oil prices,
a recovery in the global economy, and oil demand are expected to lower the fiscal breakeven oil price for the major oil producers in the Middle East,
with the fiscal breakeven oil price for Saudi Arabia dropping to $65.70 in 2022 from $77.90 in 2020.

Meanwhile, official data issued by the Kingdom of Saudi Arabia, today, Monday,
showed that the non-oil sector in the Kingdom of Saudi Arabia grew by 2.9 % in the first quarter of 2021.

However, the gross domestic product decreased by 3.0 % over the year due to the oil sector contracted by 11.7 % in the first quarter of 2021.

Economists’ forecasts for Saudi production

Bloomberg Agency published the expectations of Farouk Sousse (the economist in the Middle East and North Africa),
that Saudi oil production will rise by 500,000 barrels per day from previous estimates.

Goldman Sachs Bank believes that Brent crude will reach $80 a barrel this summer with the rapid recovery of global oil demand.

Production in Saudi Arabia is expected to rise to 9.5 million barrels per day by the end of July.

Oil production is set to reach 10 million barrels per day by the end of this year and 10.5 million barrels per day next year,
according to Goldman Sachs.

The recovery in global demand and the strong domestic recovery in oil demand also prompted Goldman
to raise its economic growth forecast for Saudi Arabia.

The American investment bank is now seeing the Saudi economy rise by 4.5 % in 2021,
compared to previous forecasts of 2.5 % growth.

A fall in Libya oil production 

Libya’s crude oil production has fallen by more than 200,000 barrels per day, or 20%, in recent days,
due to pipeline maintenance at Sharara, the largest oil field.

Libya has reduced this week’s oil production at fields operated by Waha Oil Company,
due to leaks on the pipeline connecting the oilfields to the oil export terminal, Mustafa Sanalla,
chairman of the National Oil Corporation (NOC), said during an online conference, as quoted by Bloomberg.

He also said that maintenance has reduced production in the Sharara field, the largest producing field in Libya, during the past two weeks.

It is estimated that Libya’s oil production has decreased by more than 200,000 barrels per day
from last May’s production of 1.1 million barrels per day.

last week

In the middle of last week, sources said that Libya could lose 60,000 barrels per day of oil production
after the leak of the pipeline transporting crude oil from the Al-Sammah oil field to the Sidr port.

One of the engineers of the Waha Oil Company told Reuters that it is possible to stop pumping operations in the field.

Another said that a previous leak in the pipeline was controlled the day before, but it leaked again the next day.

In recent years, Libya has not been interested in maintaining the infrastructure of the oil sector,
so it has been damaged by pipeline leaks more than once.

Now the National Oil Corp (NOC) is facing enormous challenges in rehabilitating and restoring oil facilities,
due to the lack of funds and the still volatile security situation in Libya.

A massive decline in oil inventories

Oil continues to rise and variation on the American and Asian exchanges

Oil continues to rise and variation on the American and Asian exchanges: Oil continues to capture the attention in the commodity trading market,
maintaining its strong and steady upswing, amid many constraints,
but standing still and moving at a steady pace to restore and rise from pre-epidemic prices as well.

Evest follows what is happening in the world markets, and discusses it with you daily.

Oil is moving upwards stably

Oil prices rose today, Tuesday, amid declining prospects for an agreement on Iran’s nuclear program in the near future.

The August futures price for Brent oil in London Futures Exchange reached $73.12 a barrel,
$0.26 (0.36%) higher than the closing price of the previous session.

The price of West Texas Intermediate crude oil futures for July in electronic trading on the New York Mercantile Exchange (NMX) was $71.13 a barrel,
$0.25 (0.35٪) higher than the final value of the previous session.

Negotiations on an Iranian nuclear agreement are unlikely to conclude before the country’s presidential elections scheduled for June 18,
according to S&P Global Platts, according to a statement by Deputy Foreign Minister Abbas Araghchi.

According to analysts

“If discussions continue, the new Government is likely to take a different position in the negotiations, which could further delay the agreement.”

Experts expect Iran to increase supplies from the current 2.4 million barrels per day to 2.6 million barrels per day in the third quarter to 3 million barrels per day in the fourth quarter. However, if negotiations continue for the second half of the year, these supplies are in question.

Iranian President

For his part, Iranian President Hassan Rouhani called on European Union countries and the United States to fully comply with the nuclear agreement on Monday,
adding that: “Our nuclear activities are entirely peaceful.”

“You have accepted to return to many of your commitments and have announced that you will implement them.

Accept the few issues that remain until the world and our region see more peace,
calm and constructive relations.” Rouhani said.

Analysts indicate that if Iran does not resume exports in the short term,
OPEC + will have to increase production to meet expected demand.

the US Department of Energy’s

In the meantime, the US Department of Energy’s Energy Information Administration raised its forecast for heavy oil production in June
by 32,000 barrels per day from 7.765 million barrels per day compared to 7.707 million barrels per day in May.

In July, the Energy Information Administration expected production to increase to 7.803 million barrels per day.

Investors are concerned about the epidemiological situation in Europe, where,
although the spread of the virus has slowed, some restrictions remain in place.

UK Prime Minister Boris Johnson announced on Monday that restrictive measures in England would be extended for another four weeks,
postponing their repeal from June 21 to July 19 to cover more people for the COVID-19 vaccination.

The British Prime Minister

The British Prime Minister indicated that, given the proliferation of the Delta variant, it was reasonable to wait a little longer before lifting the restrictions.

Crude oil is rising this year as ongoing COVID-19 vaccination programs have reversed the course of the epidemic in the United States, Europe, and China.

However, investors are concerned about the extension of anti-virus control restrictions in Great Britain.

Johnson said that two weeks later on July 5, the situation would be reassessed, and if there was an improvement, the deadline could be extended.

Information from Great Britain tempers market optimism about solid fuel consumption over the next summer holiday.

In addition, WHO Director-General Tedros Adhanom Ghebreyesus warned on Monday that new types of coronavirus have significantly increased
the transmission of the virus and that viruses are “moving faster.”

Meanwhile, China is a bright spot on the world’s fuel demand map.

Demand for gasoline in China fell by 5% in May than in the same period in 2019 – according to estimates by the largest domestic oil companies,
including China Petroleum & Chemical Corp.

Tokyo closes high

The Tokyo Stock Exchange closed high on Tuesday, following Wall Street the day before and pending a meeting of the U.S. Federal Reserve,
which was scheduled to start later today.

The Nikkei index of 225 Japanese high-profile companies rose by 0.96% to 29441.30 points and the expanded Topix index rose 0.8% to 1975.48 points.

Hideyuki Ishiguro of Daiwa Securities indicated that “concerns about inflation are currently
declining and cases of coronavirus infections are declining” in Japan.

“It is a favorable market environment with prospects of normalization of the economy.”

“There is a bit of a wait-and-see attitude” ahead of the Federal Reserve’s monetary policy meeting scheduled for Tuesday and Wednesday, he added.

However, this week’s decline in the Federal Reserve’s support for the U.S. economy is unlikely.

In Hong Kong, the Hang Seng Index lost 0.66% shortly before 07:00 GMT.

Shanghai and Shenzhen closed lower as well.

A variation on Wall Street

The start of the week was mixed for US stock indices.

The Standard & Poor’s 500 Index closed 0.2% higher,
again at new highs after a wave of purchases in the last 30 minutes of trading.

The Nasdaq technology index was also up 0.7%, while the Dow Jones index ended up losing 0.3%.

Interestingly, the yield on 10-year bonds rose by 4 basis points to 1.5%,
which would have a positive impact on cyclical stocks.

Oil continues to rise

Oil is at its highest level in 3 years .. European stock exchanges start at a rising edge

Oil is at its highest level in 3 years .. European stock exchanges start at a rising edge:

Oil continues to rise to new higher levels, and there are significant signs of recovery,
especially since there are now demands by the International Energy Agency for higher production
in order to suffice the increasing demand, which is expected to increase further in the coming days.

Evest follows developments in the commodity trading markets and relays them to you in the following lines.

Oil is at the highest level since October 2018

World oil prices are at a 32-month high-level today, Monday, with vaccines available worldwide that boost demand expectations, particularly in the United States and Europe.

The barrel of U.S. West Texas Intermediate crude was sold with a July contract at $71.24 on Monday at 7.41 a.m. Central European Time.

That was 33 cents or 0.47% more than on Friday at the close of trading on the New York Mercantile Exchange.

West Texas Intermediate crude had previously priced at $71.32 a barrel, the highest level since October 2018.

West Texas Intermediate crude rose 62 cents, or about 0.9%, on Friday and closed at $70.91 a barrel.

Over the entire last week, it boosted by about 1.9% and rose for the third week in a row.

As for Brent, the North Sea oil contract was sold at 34 cents, or 0.47%,
on Monday at 7.42 a.m. Central European Time at $73.03 a barrel,
before reaching $73.12 a barrel, the highest price for Brent since May 2019.

U.S. crude rises

The price of U.S. crude rises, after three weeks in a row of rising, to its highest level since October 2018.

Car traffic has returned to pre-pandemic levels in North America and most of Europe, and air traffic is gradually recovering.

Americans are slowly returning to their usual routine, returning to their offices,
meeting friends, and organizing group events, while 2 million American citizens travel daily,
for the first time since the pandemic, according to Bloomberg.

The price of West Texas Intermediate crude is moving toward its fifth quarter in a row of profit,
meaning its best performance since 2010, as consumption increases and exporting countries and their partners reduce production constraints at a very slow and gradual pace.

The International Energy Agency

The International Energy Agency predicted last week that crude demand will return to pre-pandemic levels later in 2021, calling on OPEC and its broader OPEC + partners to help balance the market by gradually opening production.

Although deregulation has progressed in the United States and part of Europe, there are still setbacks. The United Kingdom Prime Minister, Boris Johnson, is expected to postpone the full deregulation of restrictions in England, which was scheduled for 21 June, due to the widespread mutation of the Indian coronary virus coronavirus (Delta).

The nuclear program agreement

Traders will also monitor the continuation of talks in Vienna between Iran and the major powers to revitalize the Middle Eastern state’s nuclear program agreement, while presidential elections are held there on June 18.

An agreement to revive the Iranian nuclear agreement is likely to lift U.S. sanctions and increase supplies to Iranian oil markets.

Meanwhile, Iran’s Deputy Foreign Minister, Abbas Araqchi, questioned the chances of resuming the nuclear agreement before Iran’s presidential election on June 18.

Ibrahim Raisi, President Rouhani’s current rival in the Chair, and a favorite of many confirmed that he would continue the negotiations, but did not consider them a high national priority.

Iraq, OPEC’s second-largest producer, said he “expects” oil to move between $68 and $75 a barrel in the second half of 2021.

Early rises in European exchanges

European exchanges are awaiting a two-day Fed summit,
from which the market is expected to confirm the current accommodative monetary policy on Wednesday.

The Italian FTSE MIB index rose by 0.47% initially, the Frankfurt index rose by 0.5%,
Paris rose by 0.48%, and Amsterdam rose by 0.6%.

The Spanish stock market opened higher by 0.66٪ on Monday,
pending industrial production data for April in the Eurozone and in a context where the market appears to trust it given the temporary nature of rising inflation.

IBEX 35, the main Spanish selective, advanced 60.20 points,
or 0.66%, and reached 9263.70 valid number.

The year’s profits were expanded to 14.77%.

Good rise for Tokyo Exchange.. The Olympics are on time.

The Tokyo Stock Exchange rose on Monday as did Wall Street on Friday,
as investors expressed trust in the economic recovery and optimism about a temporary acceleration in U.S. inflation.

The Nikkei index of 225 major Japanese companies rose by 0.74 percent to 29161.80
and the broader Topix index rose by 0.29 percent to 1959.75 points.

Inflation will be at the heart of the U.S. Central Bank (Fed) meeting on Tuesday and Wednesday,
but this week’s decline in Fed support for the U.S. economy is unlikely, and its chairman,
Jerome Powell is expected to again believe that the current sharp price hike is only temporary.

The Bank of Japan (BOJ) is also scheduled to hold a monetary policy meeting this weekend.

Investors also welcomed the announcements of the G-7 summit this weekend.

For their part, the G-7 leaders decided to provide more than 1 billion doses of the Covid – 19 vaccines to developing countries by the end of 2022 and supported the holding of the Tokyo Olympics this summer.

Chinese markets were closed on Monday because of a local holiday.

A slight rise in the euro against the dollar

In the currency market, the euro rose barely against the dollar to 1.2107, after being at 1.2101 on Friday.

The single currency value is also 132.77 yen, while the dollar against the yen is 109.68.

 

Oil is at its highest level in 3 years