Monday, 17 June, 2019

Oil rises; lifted by OPEC cuts, steadying stock market

Goldman cuts 2019 crude price view; sees recovery from current levels Crude Oil Price Likely to Push Higher on US - China Trade Hopes
Ginger Lawrence | 09 January, 2019, 08:39

China and the US, the world's two biggest economies, restarted negotiations on Monday in Beijing to resolve their trade disputes.

Brent crude futures rose $1.39 on the day to $58.45 a barrel by 1224 GMT, up from December's slide below $50, which was its lowest level since July 2017.

Futures in NY increased as much as 1.6% following six days of gains, the longest streak of increases since July 2017.

China and the US agreed to a ceasefire in their trade war at the G20 summit in Argentina at the end of November 2018 after high-level talks between US President Donald Trump and Chinese President Xi Jinping, yet only 39 per cent of the GIQ survey respondents believed this détente would signal the end of the spat even though the world's two biggest energy importers had agreed to abandon plans to escalate tariffs on 1 January. Futures are rebounding as the Organization of Petroleum Exporting Countries and it allies start their pledged production cuts this month, led by Saudi Arabia, and after the US Federal Reserve signalled a hold in interest rate hikes that had spurred risk aversion and volatility across global financial markets.

The first trading day of the week was also stimulated by declining US crude inventories.

Societe Generale cut its 2019 oil price forecast for Brent by $9 to $64 a barrel and reduced its forecast for US light crude by $9 to $57 a barrel.

CES 2019 Quick Bytes: Consumer 10nm is Coming with Intel's Ice Lake
Intel now plans to launch Ice Lake for consumer and server products, as well as Lakefield and Snow Ridge (both discussed below). In October, Intel launched the first set of the 9th Gen Core desktop processors, including the Intel Core i9-9900K processor.

"Saudi Arabia will continue to be the decisive factor for the markets this year, just as they were last year", said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt.

The crude prices have declined by 40% after declaring the 4 year high, which was over $76 per barrel.

February natural gas NGG19, +0.98% settled at $2.967 per million British thermal units, up 0.8%, after a 3.3% drop on Monday. The global benchmark crude traded at an $8.61/bbl premium to WTI for the same month.

The America-China trade talks are showing signs of progress. While six months may be enough to reduce the combined output of OPEC and its partners by the agreed 1.2mn bpd, if USA production continues to grow at the current rate, it would likely offset this cut completely. "Fed's easier stance and Opec's commitment to cut production as well as expectations that inventories should drop are lending a hand to this positive investor sentiment".

Record high crude oil production has also pushed up USA inventories, which rose by almost 17 percent in 2018 to their highest in well over a year, according to weekly data by the Energy Information Administration (EIA) on Friday. Nationwide inventories are near their lowest level in nearly two months.