Crude oil prices take a breather after hitting 2016 highs
Published 2016-04-28 08:10:40| Amwal Al Ghad English
Crude futures pulled back from 2016 highs on Thursday as traders locked in profits after April's sharp rally, but analysts said falling U.S. production, strong investor appetite and a weakening dollar could push prices higher soon. International Brent crude futures were trading at $46.91 per barrel at 0638 GMT, down 27 cents from their last settlement. U.S. West Texas Intermediate (WTI) futures were down 20 cents at $45.13 a barrel. The dips came after both benchmarks rose on Wednesday to their highest levels for 2016 in what has been one of the steepest price increases in recent years. Both Brent and WTI have rallied more than 70 percent since their respective 2016 lows in January and February. Record crude storage figures may have spurred some investors to take profits on Thursday by closing long positions, traders said, and government data on Wednesday showed that U.S. crude stocks climbed 2 million barrels last week to an all-time peak of 540.6 million barrels. Despite the price falls, analysts said that sentiment had clearly turned bullish, and that further price rises were likely. "We ... appear to be at the beginning of a bull market," U.S. investment bank Jefferies said on Thursday. Analysts said falling output in the United States, where Energy Aspects said there were now even "murmurings of volumes falling short" of demand, and a weak dollar were supporting prices and attracting investors. "The recent trend of rising crude oil prices received another boost after U.S. output was shown to have fallen again last week," ANZ bank said, following a release by the U.S. Energy Information Administration (EIA) showing that crude oil production fell to 8.94 million barrels per day (bpd) last week, down almost half a million bpd from this time last year. While Jefferies said it expected the market to remain oversupplied in the near term, it said that crude inventories should begin to fall by the third quarter, "setting the stage for a fundamental recovery". Analysts said that further bullish momentum could emerge due to ongoing weakness in the dollar, which is down almost 6 percent this year against a basket of other leading currencies, as a weaker greenback makes dollar-traded crude cheaper to buy for countries using other currencies at home. The Federal Reserve said Wednesday that it would leave U.S. interest rates unchanged, while the bank of Japan said Thursday it would hold back from expanding stimulus. Jefferies also warned that global spare capacity, estimated around 2 million bpd, or 2 percent of demand, was "precariously low" given the frequency of unexpected disruptions recently, including pipeline interruptions and strikes, as well as "the dire fiscal situation of producers like Venezuela, Iraq and Nigeria."
- Dollar gives back some against yen
- Oil prices attempt a rebound as hopes float for production deal
- Egypt steel producers increase prices by 5% on newly-adopted VAT
- Oil prices slump 4% as no output deal expected for OPEC
- Oil prices extend rise after surprise US crude stock draw
- Oil prices climb on reported US crude stock draw, firm Japan imports
- Oil falls as Venezuela says market is 10% oversupplied
- Gold rose on weaker dollar, but caution ahead of Fed meet caps gains
- Dollar falls from 2-week high before Fed and BOJ meetings
- Oil prices drop with global glut worries in the background
Get To Know
Among their many differences, the U.S. Republicans and the Democrats have widely divergent ideas about taxes. Here’s what the parties and their candidates have said about this topic, which is near and dear to the hearts of many voters. The Republican party tax platform The Republican platform states that tax rates that penalize thrift or discourage investment must be lowered, and rules that discourage economic growth must be changed. The platform calls for eliminating unspecified special interest-loopholes while being mindful of the tax burdens that are imposed on families with children and an aging population. That’s typical boilerplate stuff. Specific proposals More specific proposals include: Making the Internal Revenue Code so simple and easy to understand that the IRS can be abolished. Removing all marriage penalties from the Tax Code. Repealing the Affordable Care Act, and the tax increases that it imposed (such as the 3.8% Medicare surtax on net investment income of higher-income individuals). Considering all options to preserve Social Security without tax increases. Reducing the corporate tax rate to be level with or below the rates charged by other industrialized nations. Adopting a balanced budget amendment that would require a super-majority for tax increases. Opposing any carbon tax. Republican presidential nominee Donald Trump aimed to cast himself as the only candidate who can deliver economic change in a speech Monday in Detroit. Watch the highlights. The Trump tax plan Donald Trump has proposed fewer tax brackets and lower rates for most individuals: 12%, 25% and 33% (versus the current rates of 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%). Rates on long-term capital gains and dividends would be 0%, 15%, and 20%. He has also pitched a proposal to allow families to deduct child-care expenses, however details are lacking. Trump would abolish the federal estate tax and the alternative minimum tax. Some individual write-offs would be curtailed, but itemized deductions for home mortgage interest and charitable donations would be retained under the current rules. Trump would cut the corporate tax rate from the current 35% to 15%, but eliminate tax deferral on overseas profits. The 15% rate would also apply to business income from sole proprietorships and income passed through to individuals from businesses conducted as S corporations, LLCs, and partnerships. Trump would impose a cap on business interest deductions. He would repeal the Affordable Care Act and the tax increases that it imposed.
The yen was almost flat against its peers during Asia trade Monday, after risk sentiment prompted buying of the Japanese currency. The greenback USDJPY, -0.45% traded at ¥100.97 after touching as low as ¥100.71 earlier in the morning session. The U.S. currency was at ¥101.00 late Friday in New York. The euro EURJPY, -0.39% was unchanged at Y113.40 from Y113.41 in New York, while the Australian dollar dropped slightly to Y76.90 from Y77.00. Tokyo stocks slid on Monday following declines in major U.S. stock indexes Friday, with the benchmark Nikkei Stock Average NIK, -1.25% falling 0.9% in late afternoon trade. Weaker stocks prompted investors to buy the safety of the Japanese currency from earlier in the session. But midday yen selling helped moderate the strength of the Japanese currency. After digesting the central bank policy events last week in Japan and the U.S., investors were lacking fresh cues during Asia trade to give a new direction to the dollar. Investors are waiting for Bank of Japan Gov. Haruhiko Kuroda’s speech at a meeting with business leaders in Osaka, western Japan later today. But investors do not expect Kuroda to provide any fresh incentives after the BOJ’s new policy framework unveiled last week, which included a target of around zero for the benchmark 10-year Japanese government bond yield. Currency market participants are also awaiting the first U.S. Presidential debate between Hillary Clinton and Donald Trump later Monday in the U.S. Having confirmed its downside support even after falling below the ¥100-line since July, “I don’t expect the dollar will slide without trading cues,” said Shinichiro Kadota, senior FX and rate strategist at Barclays in Tokyo. He added that the dollar will likely remain in a ¥100-Y101 range for the time being. In other currency trade, the euro EURUSD, +0.0267% was at $1.1229 midday from $1.1224. The WSJ Dollar Index BUXX, -0.03% a measure of the dollar against a basket of major currencies, was up 0.01% at 86.51.
The Market Quotes Powered By Forexpros, the Forex, Futures, and Stock Markets Portal.
Most Popular »
- Egypt signs $595 mln oil, gas agreements with BP, Eni’s unit
- Russia, Egypt agree to resume gradually air flights from October: sources
- A trip to NY leaves Egypt MPs impressed by Donald Trump
- U.S.-Egypt trade exchange falls 21.6% in H1
- Public banks seize 40.8% of Egypt t-bills investments by June-end