Wholesale retractions… Oil and European indices in the Red Zone

تراجعات بالجملة.. النفط والمؤشرات الأوروبية في المنطقة الحمراء

Wholesale retractions.. Oil and European indices in the Red Zone

Wholesale retractions.. Oil and European indices in the Red Zone: The first trading day of this week started negatively in the commodity trading market, when oil fell after hitting its highest levels in more than two years, as market participants await what will happen in the US-Iran talks. 

Evest follows all developments in the market and relays them directly to you.

Oil awaits US-Iran talks

Oil prices fell today, Monday, as investors waited for progress in Vienna talks on Iran’s nuclear energy.

This week’s talks are crucial for the United States to lift sanctions on the oil, banking, and shipping sectors of the Middle Eastern country.

Brent crude futures for August were at $71.29 a barrel, down $0.60, or 0.85%.

US West Texas Intermediate crude oil futures for July are trading down $0.50, or 0.70%, at $69.13 a barrel.

Delays in negotiations on Iran’s nuclear program have contributed to price rises over the past week, in addition to dampening expectations for additional oil supplies to the market, as well as the cautious approach of OPEC+ countries to increase production. 

According to Bloomberg

According to Bloomberg analysts: the US economy is doing well and OPEC + does not seem to be planning firmly to increase production, the market was expecting the return of the normal tourist season, and US and European data show that these expectations have been met.”

After last week’s meeting, OPEC + countries decided not to change their plans to increase production, believing that progress in vaccination campaigns against the Coronavirus, despite the remaining restrictive measures in some regions, gave hope for a rapid recovery in demand, while the prospects for Iranian oil remain uncertain.

Last week, OPEC+ confirmed prudent mitigation of supply restrictions.

The expanded exporters’ association will resubmit about 2 million barrels per day to the market by July, gradually reducing production cuts and respecting commitments made last April.

In April, OPEC + ministers decided to gradually resume production: In May, the parties to the agreement were able to increase production by 350 thousand barrels per day, as in June and July – 441 thousand barrels per day. 

Saudi Arabia

Saudi Arabia also abandons voluntary restrictions of 250000 barrels per day in May, 350 thousand barrels per day in June, and 400 thousand barrels per day in July.

However, there is a potential for crude oil to fall as well because some investors decided to sell for profit when West Texas Intermediate crude crossed the $70 per barrel mark. 

According to Reuters

According to Reuters, the main concern is the return of Iranian barrels to the market, but no one believes there will be an agreement before Iran’s presidential election, which is expected on June 18.

Oil prices haven’t been that high for years, with US West Texas Intermediate crude in October 2018 breaking the $70 mark. 

Today, although the exchange rate has only touched this level for a moment, it is a good indication that global demand for oil and fuel is rising again.

The West Texas Intermediate crude is currently at $69.2, but during the day it also briefly looked above $70.

It’s risen by more than 40 per cent since the start of the year.

The price of Brent, the most European-related type, has been above $70 since the beginning of June, currently at $71.5,
and has also risen by about 40 percent since the start of the year.

The demand for oil is particularly strong.

This is due to the increasing demand for fuel in the United States and the economic recovery in Europe and Asia.

On the other hand, just days ago, the Russian company Rosneft warned the market that there could be problems in the oil supply due to the rapid transfer of energy. 

A collective decline in most European indices.. Nikkei is high

The major European stock markets opened the session lower, weighed by last Friday’s US official employment report, which, although improved from the previous month, came in negative in May for the second month in a row.

Minutes after the opening, at 07:00 GMT, Frankfurt was declining the most of the European markets by 0.25%; Followed by Madrid at 0.21%. Paris 0.15% and Milan 0.10%.

London Stock Exchange rose only slightly by 0.11%.

On the other hand, the EURO STOXX 50 index, which includes the main European companies, fell by 0.16%.

In Asia’s stock market, the main index of the Tokyo Stock Exchange,
the Nikkei, rose by 0.27% on Monday after weak employment data in the United States
raised expectations that the country would not push the withdrawal of economic stimulus.

Collective gains on Wall Street

Wall Street closed with gains on Friday and its main index, the Dow Jones Industrial Index,
rose by 0.52% after the U.S. employment report, which still reflects the economic recovery from the COVID-19 pandemic.

Dow Jones index rose by 0.52% to 34756 points, while Big S & P 500 index rose by 0.88% to 4229 points,
now approaching their all-time highs, recorded on May 7. 

NASDAQ Composite Index, rich in technology and biotechnology stocks,
rose by 1.47% to 13814 points, about 2% from its peak of 14138 points on April 26.

Over the past 4-day week (Monday was a Memorial Day holiday),
the three indices rose by 0.7%, 0.6%, and 0.5%, respectively.

The yield on U.S. bonds, which worries investors most, rose to 1.574%.

This week investors will mainly be watching the European Central Bank meeting and U.S.

consumer price index data, which will continue to push upward in the short term,
and the data will be released next Thursday.

Tomorrow they will also pay special attention to the release of ZEW Economic Sentiment indices in Germany.

Wholesale retractions

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