Oil rises as US dollar soars with Asian stocks decline and European stock indexes jump
Oil prices rose on Monday,
but remained near several-month lows as recession concern weighed on demand expectations,
while Asian stocks fell and the US dollar rose as gold declined.
topic
Brent crude rose to $95.14 per barrel
Asian stocks decline and the dollar rebounds due to US interest rate risk
US dollar rises while gold declines
Brent crude rose to $95.14 per barrel
By Monday morning, October Brent crude futures rose by $0.22,
or 0.23 percent on the London Futures Exchange, to $95.14 per barrel.
Through Friday’s trading, Brent crude rose by $0.8,
or 0.85 percent, to $94.92 per barrel.
WTI futures prices for September at this time
in electronic trading on the New York Mercantile Exchange
(NYMEX) rose by $0.15, or 0.17 percent to $98.24 per barrel.
During the previous session, the futures contract
rose by $0.47, up 0.5 percent to $89.01 per barrel.
As a result of the previous week,
the price of Brent crude fell by about 9 percent,
West Texas Intermediate crude fell by about 10 percent and, at present,
futures are approaching a six-month minimum.
Analysts say the reason for the fall in Brent crude prices is a decline in liquidity
and a “rising wave of concern,” including a recession,
China’s “zero tolerance” policy with the coronavirus,
the release of strategic reserves in the United States and the restoration of production in Russia.
Oil price forecasts for the third and fourth quarters of 2022 fell to $110 and $125 per barrel,
respectively, from $140 and $130 per barrel,
and the forecast for 2023 remained unchanged at $125 per barrel.
Asian stocks decline and the dollar rebounds due to US interest rate risk
Asian stock markets fell on Monday and the dollar continued to hold steady
after the release of a stunning US jobs report that overshadowed recession talk,
but also boosted more large rate increases.
Markets quickly moved to a potential rate of nearly 70 percent after the Federal Reserve
decided to raise interest rates by 75 basis points in September,
increasing yields for the two years by 20 basis points on Friday and further reversing the curve.
Despite slowing growth and an expected decline to 0.2 percent on a monthly basis from July’s CPI gains,
the Fed is likely to raise interest rates by 75 basis points at its September meeting.
Stock markets are fraught with risks as futures for the S&P 500 and Nasdaq fell by 0.1 percent,
and MSCI’s broadest index of Asia-Pacific stocks outside Japan fell by 0.5 percent,
after three sessions of gains.
Japan’s Nikkei index rose by 0.3 percent and
South Korea’s Kospi stabilized,
while Chinese blue chips fell by 0.2 percent.
EUROSTOXX 50 futures fared better and rose by about 0.5 percent,
while FTSE futures rose by 0.3 percent.
There was no clear reaction in the market to news
that the US Senate on Sunday approved a sweeping $430 billion bill aimed
at combating climate change after some tax concessions in the deal.
artical name Oil rises as US dollar soars with Asian stocks decline
US dollar rises while gold declines
Two-year Treasury yields rose by 3.25 percent,
a 40 basis points increase over 10-year yields.
Bonds also received a safe haven offer due to concern over Beijing’s military conflict against
Taiwan as China conducts four days of military exercises across the island.
Chinese data released over the weekend showed exports unexpectedly rising in July with an 18 percent gain,
while imports were delayed with a rise of just 2.3 percent.
The job boom was combined with a jump in yields to support the US dollar,
which rose by 106.640 against a basket of currencies that rose by 0.8 percent on Friday.
This key data point is within a million miles of the current recession,
whether based on employment change, or unemployment levels.
The US dollar stabilized at 135.27 yen after jumping by 1.6 percent on Friday,
while the euro was struggling at $1.0182
and not far from supporting the chart around $1.0095.
The dollar’s rally was a setback for gold,
although it managed to bounce back from Friday’s lows to stand at $1,773.
artical name Oil rises as US dollar soars with Asian stocks decline
European stock futures rise
European stock markets are expected to open slightly higher on Monday,
early in the week which includes the release of major US inflation data and
UK GDP data as well as more quarterly corporate profits.
At 0600 a.m. GMT, Germany’s DAX futures rose by 0.6 per =cent,
France’s CAC 40 futures rose by 0.1 percent
and the UK’s FTSE 100 futures index rose by 0.4 percent.
European stocks posted gains this week,
boosted by largely positive corporate earnings,
however, they closed lower on Friday after a stronger-than-expected US jobs report
dampened hopes that the Federal Reserve could relent in its aggressive campaign to tame inflation,
which is hitting activity in the world’s largest economy and biggest growth driver.
artical name Oil rises as US dollar soars with Asian stocks decline