Event features the participation of 2,900 companies from 59 countries, attracting over 137,000 visitors
business2 days ago
Oil prices climbed about two per cent to a one-week high on Monday, buoyed by hopes of rising fuel demand this summer despite a stronger US dollar and expectations the US Federal Reserve will leave interest rates higher for longer.
The Fed uses higher interest rates to reduce inflation. Those higher rates boost borrowing costs for consumers and businesses, which can slow economic growth and reduce demand for oil.
Similarly, a stronger US dollar can reduce demand for oil by making dollar-denominated commodities like oil more expensive for holders of other currencies.
Brent futures rose $1.36, or 1.7 per cent, to $80.98 a barrel by 1524 GMT, while US West Texas Intermediate (WTI) crude rose $1.46, or 1.9 per cent, to $76.99.
That puts both crude benchmarks on track for their highest closes since May 31.
Goldman Sachs analysts expect Brent to rise to $86 a barrel in third quarter, saying in a report that solid summer transport demand will push the oil market into a third-quarter deficit of 1.3 million barrels per day (bpd).
The US dollar, meanwhile, rose to a one-month high against a basket of other currencies as the euro fell sharply due to political uncertainty in Europe after gains by the far right in voting for the European Parliament prompted a bruised French President Emmanuel Macron to call a snap national election.
“The increase in (crude) prices started as the US wakes up and kicks off the new week. Investors on the other side of the Atlantic clearly dismiss the euro weakness and the resultant dollar strength due to French snap elections,” said Tamas Varga of oil broker PVM. “There is a growing conviction that demand will be buoyant as the summer driving season approaches leading to considerable stock draws.”
Oil last week posted a third straight weekly loss on concerns that a plan to unwind some production cuts by the Organisation of the Petroleum Exporting Countries (Opec) and its allies, known collectively as Opec+, from October will add to rising supply.
Despite the Opec+ cuts, oil inventories have risen. US crude stocks rose in the latest week, as did gasoline stocks. Energy consultancy FGE also expects oil to rally, with prices reaching the mid-$80s into the third quarter.
“We continue to expect the market to firm up,” FGE said. “But it will likely need a convincing signal of tightening from preliminary inventory data.”
Investor attention now turns to the key US Consumer Price Index inflation data for May on Wednesday for hints on when the Fed may start reducing interest rates.
The market is also waiting for the conclusion of the Fed’s two-day policy meeting on Wednesday, in which the central bank is overwhelmingly expected to hold interest rates steady.
Markets dialed back expectations for rate cuts by the Fed in September after Friday’s data, with pricing now reflecting a less-than-50 per cent chance of a reduction. Expectations had risen as high as 69 per cent last week.
Traders also trimmed their expectations for the amount of easing this year, with pricing implying just one cut versus two prior to the payrolls data, according to data from financial firm LSEG.
Event features the participation of 2,900 companies from 59 countries, attracting over 137,000 visitors
business2 days ago
Gross paid claims of all types of insurance plans rose 34% year on year
business2 days ago
Event attracted representation from more than 60 countries
business2 days ago
Renewed brand identity centres around the belief that “Food is a Blessing”
business2 days ago
Dubai, Abu Dhabi, and Sharjah are among the top 10 startup ecosystems in the region
business3 days ago
Brokers licensed in financial free zones for reinsurance businesses are exempt from these changes as a regulatory regime will apply to them
business3 days ago
Measures are aimed at preserving the integrity and sustainability of the nation's financial and economic system
business3 days ago
Several Indian and foreign companies setting up facilities in India
business3 days ago