2023-12-21 01:21

Copyrighted Image by: Reuters. Investing.com -- Oil prices fell Thursday after Angola decided to exit the Organization of the Petroleum Exporting Countries (OPEC), pointing to a further weakening in the "OPEC put," stoking worries about the oil producer cartel's ability to collectively support oil prices by limiting production. By 14:30 ET (19:30 GMT), the U.S. crude futures settled 0.4% lower at $73.89 a barrel and the Brent contract dropped 0.4% to $79.39 a barrel. Angola exit adds to further worries about weakening OPEC put Angola's oil minister Diamantino Azevedo said it would exit OPEC as membership in the group was no longer serving the country's interest. "If we remained in OPEC … Angola would be forced to cut production and this goes against our policy of avoiding decline and respecting contracts," Azevedo said. The exit from Angola, which producers over 1.1 million barrels of oil per day, marked a further blow to confidence in the oil-producer group's to control prices after its most recent agreement was fraught with infighting. Signs of weakness in the "OPEC put," or the group's ability to limit production and support prices, come as rising output from non-OPEC members including the U.S. have stoked concerns about a supply surplus. The EIA said U.S. crude output rose to a record 13.3 million barrels per day, up from the previous all-time high of 13.2 million barrels. Concerns of disruptions to supply through Red Sea remain The Angola exit has overshadowed the ongoing concerns of disruptions to the global supply of crude through the Red Sea and Suez canal following the missile and drone attacks on ships in the Red Sea by the Iran-aligned Yemeni Houthi militant group. Around 12% of world shipping traffic passes through the Suez Canal, heading mostly from the Mediterranean to the important Asian market. The United States has announced the creation of a multinational naval task force to defend commerce in the region, but the Houthis have vowed to continue their attacks, which they claim is in support of the Palestinians in Gaza. The Israel-Hamas war so far has had little impact on oil supplies, but traders remain on edge over the conflict drawing in more Middle Eastern powers, which could tangibly disrupt supplies from the oil-rich region. https://www.investing.com/news/commodities-news/oil-prices-settle-lower-as-angola-exit-stokes-concerns-of-weakening-opec-put-3261239

2023-12-21 01:21

Copyrighted Image by: Reuters. Investing.com-- Oil prices fell in Asian trade on Thursday as momentum in a recent rally was culled by data showing an unexpected build in U.S. inventories, while talks over a potential ceasefire in the Israel-Hamas war dented bets on more supply disruptions. Media reports showed Hamas leader Ismail Haniyeh in Egypt for potential peace talks with Israel, coming just a week after the U.S. vetoed a United Nations resolution for a ceasefire in the war. Haniyeh’s talks with Israel raise the prospect of a potential deescalation in the conflict, which could in turn lessen disruptions in shipping activity in the Red Sea. Brent oil futures expiring February fell 0.8% to $79.05 a barrel, while West Texas Intermediate crude futures fell 0.7% to $73.91 a barrel by 20:05 ET (01:05 GMT). Crude prices rebounded sharply from five-month lows over the past week, boosted by the prospect of supply disruptions in the Middle East after Yemen-backed forces attacked several vessels in the Red Sea over the Israel-Hamas war. The move saw oil and shipping firms steer clear of the Suez Canal, pointing to potential delays in deliveries. The U.S. also launched a 10-nation naval force to enforce security in the region. But whether this had a tangible impact on global crude supplies remained unclear, especially as European and U.S. oil inventories remained high, as did production in the Americas. Traders told Reuters that unless the disruptions in the Red Sea persisted for more than a few weeks, they were unlikely to impact supplies. The Israel-Hamas war so far had little impact on oil supplies since its onset in October. But traders still remained on edge over the conflict drawing in more Middle Eastern powers, which could tangibly disrupt supplies from the oil-rich region. US inventory build cuts short crude rebound Oil prices faced pressure on Wednesday following data showing an unexpected build in U.S. crude stockpiles. U.S. inventories grew 2.9 million barrels in the week to Dec. 15, ducking expectations for a draw of 2.3 million barrels. Production remained close to record highs, while a bigger-than-expected build in gasoline and distillate inventories also pointed to cooling fuel demand. The data ramped up concerns over well-supplied oil markets in 2024, especially after underwhelming production cuts from the Organization of Petroleum Exporting Countries (OPEC). Oversupply concerns had put oil prices at five-month lows at the beginning of December. A rebound in the dollar also pressured crude, as the greenback rose sharply on Wednesday amid some profit taking on Wall Street and a sharp drop in the pound. Markets also questioned just when the Federal Reserve will begin trimming interest rates in 2024. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVSPRO2024 to avail a limited time discount on our Pro and Pro+ subscription plans. Click here to know more, and don't forget to use the discount code when checking out! https://www.investing.com/news/commodities-news/oil-prices-sink-on-israelhamas-ceasefire-talks-us-inventory-build-3261239

2023-12-20 09:04

Copyrighted Image by: Reuters. Investing.com - The U.S. dollar edged higher in early European trade Wednesday, while sterling slumped as rapidly cooling inflation lifted expectations of Bank of England rate cuts next year. At 03:05 ET (08:05 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 101.894, not far removed from its recent four-month low of 101.76. Fed officials prop up the dollar The dollar has been on the backfoot since last week's policy-setting meeting of the U.S. Federal Reserve saw three rate cuts penciled in for 2024, although these losses have largely been contained as a series of Fed policymakers have attempted to rein in these dovish expectations. This continued on Tuesday, with Raphael Bostic, president of the Atlanta Federal Reserve, saying there was no "urgency" now for cuts, while Richmond Fed President Thomas Barkin said whether the central bank can deliver on forecasts of rate cuts depends on how the economy performs. U.S. economic data due on Wednesday centers around the housing market, in the form of November existing home sales. However, the core Personal Consumption Expenditures price index, the Fed’s favorite measure of inflation, is due on Friday, and could show whether inflation has slowed enough for the Fed to begin easing policy next year. Pound slumps after sharp fall in U.K. inflation In Europe, GBP/USD fell 0.5% to 1.2662 after U.K. inflation plunged in November, dropping to 3.9% from 4.6% in October - the lowest reading since September 2021. The important core annual figure, which excludes volatile food and energy prices, also dropped by an unexpectedly large amount, falling to 5.1% from 5.7%. The Bank of England kept its main interest rate unchanged at its meeting last week, but stated rates would remain high for "an extended period." However, this reading has prompted traders to fully price in a rate cut by May 2024, causing the pound to fall sharply. EUR/USD fell 0.2% to 1.0961, after German producer prices also fell more than expected, dropping 0.5% on the month in November, an annual decline of 7.9%. This reduction in factory gate prices is expected to feed into improving German consumer sentiment with the start of the new year, with the GfK institute’s forward-looking consumer sentiment index rising to -25.1 points heading into January from a revised -27.6 the month before. The European Central Bank also kept interest rates unchanged last week, but investors are now looking for several rate cuts from the ECB next year with the first moves potentially in the first quarter. Yen steadies after BOJ-inspired fall Elsewhere, USD/JPY traded 0.2% lower at 143.57, with the yen stabilizing after tumbling sharply from near four-month highs in the prior session. The yen’s weakness came as the Bank of Japan maintained its ultra-dovish stance in its last meeting for the year, and signaled little intent to immediately begin tightening policy in 2024. USD/CNY traded 0.1% higher at 7.1367, after the People’s Bank of China left its loan prime rate unchanged at record lows. While the move was widely expected, it highlighted just how little headroom the PBOC had to keep policy loose and support an economic recovery in China. https://www.investing.com/news/forex-news/dollar-steady-sterling-falls-after-sharp-drop-in-uk-inflation-3260452

2023-12-20 06:06

Copyrighted Image by: Reuters. Investing.com-- Gold prices steadied on Wednesday, sticking to a trading range established over the past week amid persistent bets that the Federal Reserve will trim interest rates earlier in 2024. The yellow metal appeared to have established a trading range of low-$2,000 to $2,050 an ounce, amid growing optimism over lower interest rates in the coming year. But increased risk appetite saw capital flows into gold remain limited, as traders piled into higher-yielding assets. Still, gold prices remained above the coveted $2,000 level, with this week’s gains also putting them closer to record highs of near $2,150 an ounce. Spot gold was flat at $2,040.03 an ounce, while gold futures expiring February rose 0.1% to $2,053.05 an ounce by 00:25 ET (05:25 GMT). Both instruments saw strong gains on Tuesday, as the dollar sank to four-month lows and Treasury yields fell below key levels. March rate cut bets persist even as Fed officials warn otherwise Warnings from some Fed officials- that bets on an early rate cut from the central bank were overstated- did little to deter expectations that the Fed will begin trimming rates by as soon as March 2024. Fed Fund Futures prices showed traders pricing in a 67.5% chance for a 25 basis point cut in March, up from the 62.7% chance seen a day earlier. This came even as some Fed officials warned that the Fed remained uncertain over its timing of interest rates, amid sticky U.S. inflation. Resilience in the U.S. economy could also give the Fed more headroom to keep rates higher for longer. Still, gold stands to benefit from a lower interest rate environment, given that higher rates push up the opportunity cost of investing in the yellow metal. But gains in gold may be held back by increased risk appetite, especially if the U.S. economy exhibits more signs of heading for a soft landing. Such a scenario is also expected to sap safe haven demand for the yellow metal. Copper prices benefit from China bets, tight supply outlook Among industrial metals, copper prices hovered near a more than four-month high on Wednesday, amid growing expectations of tighter supplies and increased demand in 2024. Copper futures expiring in March rose 0.2% to $3.9143 a pound. Supplies of the red metal are expected to be limited going into 2024, after major mine closures in Peru and Panama. This is expected to coincide with an increase in demand, especially with the rising popularity of electric vehicles and green energy sources. Chinese copper demand is also expected to increase as Beijing rolls out more infrastructure spending to support the economy. But the timing of more China stimulus remains a key point of uncertainty for copper bulls. China’s central bank kept its benchmark lending rates on hold at record lows on Wednesday- signaling that the country has limited headroom to unlock more monetary stimulus. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVSPRO2024 to avail a limited time discount on our Pro and Pro+ subscription plans. Click here to know more, and don't forget to use the discount code when checking out! https://www.investing.com/news/commodities-news/gold-prices-steady-above-2000-as-fed-rate-cut-bets-persist-3260351

2023-12-20 04:39

Copyrighted Image by: Reuters. Investing.com-- Most Asian currencies steadied from recent gains on Wednesday, while the dollar remained pinned near four-month lows as traders largely stuck to bets that the Federal Reserve will begin trimming interest rates in early 2024. Traders also largely looked past warnings from Fed officials that enthusiasm over early rate cuts was overplayed, with a sustained decline in the dollar and Treasury yields pointing to growing conviction that rates could begin falling by as soon as March 2024. This notion boosted most risk-driven assets, with rate-sensitive Asian units such as the South Korean won and the Australian dollar up between 0.1% and 0.2% on Wednesday. The two were also trading close to five-month highs. Fed rate cut bets persist, March 2024 seen as start of easing cycle Broader Asian currencies rose slightly on Wednesday, and were sitting on strong gains over the past week, after the Fed signaled that it was done raising interest rates and will lower rates in 2024. The move triggered sharp losses in the dollar, and spurred increased speculation over when the central bank will begin trimming rates. Goldman Sachs expects five cuts in 2024, with a majority of them biased towards the first half of the year. Fed Fund futures prices show traders pricing in an over 67% chance for a 25 basis point cut in March 2024. The central bank is also expected to trim rates further in April and May. The dollar index and dollar index futures steadied in Asian trade, and were close to their weakest levels since early-August. Lower U.S. rates lessen the dollar’s appeal, and push investors into higher-yielding, risk-driven assets. But Fed officials warned that this trade remains at risk, especially if inflation remains sticky and necessitates a higher-for-longer stance on rates from the Fed. Chinese yuan lags as PBOC leaves rates static Dovish moves from Asian central banks weighed on some regional units. The Chinese yuan fell 0.1% to 7.1346 against the dollar, after the People’s Bank of China left its loan prime rate unchanged at record lows. While the move was widely expected, it highlighted just how little headroom the PBOC had to keep policy loose and support an economic recovery in China. The Japanese yen was flat after tumbling sharply from near four-month highs in the prior session. The yen’s weakness came as the Bank of Japan maintained its ultra-dovish stance in its last meeting for the year, and signaled little intent to immediately begin tightening policy in 2024. Weak imports and exports data also weighed on the yen, as economic conditions in Japan’s biggest trading partners deteriorated. The Indian rupee was flat near record lows, while the Singapore dollar rose slightly. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVSPRO2024 to avail a limited time discount on our Pro and Pro+ subscription plans. Click here to know more, and don't forget to use the discount code when checking out! https://www.investing.com/news/forex-news/asia-fx-steady-dollar-near-4mth-low-as-early-rate-cut-bets-persist-3260323

2023-12-20 02:17

Copyrighted Image by: Reuters. Investing.com -- Oil prices settled higher Wednesday, but upside momentum was stifled by an unexpected jump in U.S. crude supplies that fueled fresh concerns about growing global output outpacing demand. By 14:30 ET (19:30 GMT), the U.S. crude futures settled 0.4% higher at $74.22 a barrel and the Brent contract climbed 0.59% to $79.70 a barrel. U.S. inventories spring surprise build Inventories of U.S. crude unexpected jumped by roughly 2.9M barrels in the week ended Dec. 8, confounding expectations of a draw of about only 2.3M barrels. Gasoline inventories, one of the products that crude is refined into, increased by roughly 2.7M barrels against expectations for a build of 1.2M barrels while distillate stockpiles rose by 1.5M barrels, compared to expectations of a rise of 496,000 barrels. Renewing focus on a potential supply surplus, the Energy Information Administration reported that U.S. crude oil production was a record 13.3M barrels a day, up 200,000 barrels-a-day from the prior week. Greece advises tankers to avoid Yemeni waters Concerns about supply disruptions have helped underpin oil prices amid attack on ships in the Red Sea by the Iran-aligned Yemeni Houthi militant group. Around 12% of world shipping traffic passes through the Suez Canal, heading mostly from the Mediterranean to the important Asian market. These fears were exacerbated Wednesday after Greece advised commercial vessels sailing in the region to avoid Yemeni waters. Greek ship-owners control about 20% of the world's commercial vessels in terms of carrying capacity. The United States has announced the creation of a multinational naval task force to defend commerce in the region, but the Houthis have vowed to continue their attacks, which they claim is in support of the Palestinians in Gaza. European inflation cools The market also received a boost Wednesday as inflation data fell more than expected in Germany, in the form of producer prices, while British inflation plunged in November to its lowest rate in over two years. Evidence that inflation is cooling in Europe has raised expectations that the European Central Bank, as well as the Bank of England, will start cutting interest rates early next year, potentially boosting economic activity and thus the demand for crude. https://www.investing.com/news/commodities-news/oil-prices-steady-as-markets-watch-us-inventories-red-sea-risks-3260290