​Oil prices rise on outlook for tighter supply

2023-05-23
Summary:

Wall Street shares were mixed and European stocks finished little-changed as talks in Washington resumed to avert a U.S. default, while gold prices retreated under pressure from hawkish remarks by Fed officials.

Wall Street shares were mixed and European stocks finished little-changed as talks in Washington resumed to avert a U.S. default, while gold prices retreated under pressure from hawkish remarks by Fed officials.


House Republican Speaker Kevin McCarthy said Monday morning's debt talks were ‘on the right path’. A failure to lift the debt ceiling would trigger a default, likely sparking chaos in financial markets and a spike in interest rates.


Oil prices edged up 1% with a rise in U.S. gasoline futures and forecasts for oil demand to rise in the second half of the year, while supplies from Canada and OPEC+ declined in recent weeks.


Commodities

The IEA warned of a looming oil shortage in the second half of the year when demand is expected to eclipse supply by almost 2 million bpd.

XBRUSD

A senior executive at Vitol said Asia will lead oil demand growth of around 2 million bpd in the second half of the year, an increase that could potentially lead to a shortage of supply.


Adding to oil gains, wild fires shut in large amount of crude supply in Canada and voluntary production cuts by the OPEC+ which began this month.


Total exports of crude and oil products from OPEC+ plunged by 1.7 million bpd by May 16, JP Morgan said, adding that Russian oil exports will likely fall by late May.


Forex

The dollar rose against the Japanese yen, holding just below a six-month high. The greenback has gained for the past two weeks on stronger than expected economic reports and hawkish Fed officials.


The dollar got a mild boost after St. Louis Fed President James Bullard said that the Fed may still need to raise its benchmark interest rate by another half-point this year.


‘Friday there was a bit of a setback but there's a bit more optimism after the weekend,’ said Francesco Pesole, FX strategist at ING. ‘Markets are seeing a deal on the debt limit and at the same time the Fed pushing back on rate cuts which is ultimately proving positive for the dollar.’

​Oil rises 3% on US debt ceiling progress

​Oil rises 3% on US debt ceiling progress

Global equities rose on Thursday after the U.S. House of Representatives passed a bill to raise the federal debt ceiling, while U.S. Treasury yields fell as data reflected a cooling labor market.

2023-06-02
Changes in non-farm payrolls

Changes in non-farm payrolls

U.S. employers boosted hiring in April while raising wages for workers, pointing to sustained labor market strength. NFP are expected to rise by 190,000 in May, a cooling of the surprise gain of 253,000 jobs created in April.

2023-06-01
​Euro sinks to a fresh two-month low on cooling inflation

​Euro sinks to a fresh two-month low on cooling inflation

​Global equities and U.S. Treasury yields were lower on Wednesday as risk-off sentiment dominated markets, with investors focused on a vote in Congress on raising the U.S. debt ceiling.

2023-06-01