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What’s happening: Crude oil futures declined by more than $2 per barrel on Friday.
What happened: The Energy Information Administration (EIA) reported an increase in US crude stockpiles.
Expectations of oil flows resuming from Iraq and Russia and reports of a newly discovered coronavirus also weighed on oil prices.
Why it matters: The EIA reported on Thursday that crude oil inventories in the US had risen by 4.633 million barrels in the week ended February 14. The figure came in much higher than market expectations of a build of 3 million barrels.
Crude stockpiles at the Cushing, Oklahoma delivery hub also climbed by 1.472 million barrels. This marked the largest increase since May 2024.
Although the OPEC+ has been postponing production hikes, expectations of it doing so in the near future has kept oil prices in check. The OPEC+ is scheduled to announce its decision of a production hike of as much as 120,000 barrels a day in March.
Meanwhile, the Trump administration’s moves to put an end to the Russia-Ukraine war triggered speculations of the lifting of sanctions on crude supplies from Russia. US President Donald Trump has also been pressurising Iraq to resume Kurdish oil exports.
Chinese researchers identified a new coronavirus that enters human cells as SARS-CoV-2, the virus responsible for Covid-19. The findings raised concerns around a possible transmission to humans, impacting market sentiment.
WTI crude for April delivery declined by $2.24, or 3.09%, to close at $70.24 a barrel on the NYMEX (New York Mercantile Exchange) on Friday. WTI prices recorded a weekly loss of around 0.45% and have lost almost 5% over the past month.
April Brent crude declined by $2.05, or 2.68% to settle at $74.43 a barrel on ICE Futures Europe, falling 0.4% in the week.
What to watch: Investors will continue monitoring peace talks between the Trump administration and Russian officials.
Markets will also watch any new reports of the virus spreading to humans.
Context: Hong Kong equities rose sharply on Friday to hit a three-year high.
Details: Chinese tech stocks listed in Hong Kong climbed on Friday on strong corporate earnings.
Alibaba’s stock spiked almost 15% to its highest level since late 2021, after the Chinese ecommerce giant reported a revenue beat for the quarter ended December 31. Lenovo’s stock added more than 15% to reach almost a ten-year high on blockbuster quarterly results.
Xiaomi’s stock climbed more than 5% on optimism around the company’s transition from an electronics hardware maker to creating AI-powered ecosystems.
The Hang Seng Tech index added 6.15% on Friday. Hong Kong’s Hang Seng index jumped 3.99% to close at 23,477.92, its highest level since February 2022. The index has climbed around 17% over the past month.
Meanwhile, the Shanghai Composite Index rose by 0.85% to 3,379.11.
What to watch: Investors will continue monitoring reports of the Chinese government’s initiatives to boost tech companies after President Xi Jinping met with leaders of the country’s tech majors last week.
Markets will also watch Hong Kong’s balance of trade data, scheduled to be released on Tuesday. The country’s trade deficit narrowed to HK$34.5 billion in December, from HK$59.9 billion in the year-ago month. Expectations call for a turnaround to a trade surplus of HK$7 billion.
Other Markets: US trading indices closed lower on Friday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 1.69%, 1.71% and 2.20%, respectively.
Ukrainian President Volodymyr Zelenskyy offered to relinquish his position in exchange for a membership in NATO after his country faced the largest Russian drone attack since the war began. The news sent the RUB/USD pair higher in forex trading this morning.
New Zealand’s retail sales grew by 0.2% year-on-year in the fourth quarter, rebounding from a 2.5% decline in the previous quarter. This being the first gain since the third quarter of 2022 lent support to the NZD/USD forex pair.
Qatar’s value of loans grew by 3.60% year-on-year in January, decelerating from 4.2% in the previous month. Despite this, the QAR/USD pair rose slightly in forex trading this morning.
Israel’s manufacturing production grew by 2.60% in December, accelerating from 0.10% in the previous month, lending support to the ILS/USD forex pair.
Peru’s economy expanded by 4.2% year-on-year in the fourth quarter, accelerating from 3.9% in the prior period. This being the fourth annualised expansion since the fourth quarter of 2022 sent the PEN/USD pair higher in forex trading this morning.
Austria’s inflation rate (12:00 UAE Time), Germany business climate (13:00 UAE Time), Cyprus’ inflation rate (14:00 UAE Time), Eurozone’s inflation rate (14:00 UAE Time), Brazil’s consumer confidence (15:00 UAE Time), Mexico’s inflation rate (16:00 UAE Time), US Chicago Fed national activity index (17:30 UAE Time), Belgium’s business confidence (18:00 UAE Time), Israel’s inflation rate (18:00 UAE Time) and US Dallas Fed manufacturing index (19:30 UAE Time).
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