Account
New to ADSS? Open an
account now to get started.
Already have an account?
Add funds to your ADSS account
Account
New to ADSS? Open an
account now to get started.
Add funds to your ADSS account
What’s happening: Oil prices moved higher on Wednesday, following the release of data on weekly crude inventories in the US.
What happened: Crude prices had declined on Tuesday, after a weekend rebellion by the Wagner Group mercenary force in Russia.
WTI crude oil closed trading at its strongest level in a week on Friday, following the second consecutive weekly draw from US crude stockpiles.
Why it matters: Oil prices started the week on an upward trajectory as traders assessed the brief rebellion by the Wagner Group, which was later called off by the group’s leader, Yevgeny Prigozhin.
Crude prices declined on Tuesday, amid concerns over the global economic outlook. European central banks announced rate hikes last week, raising concerns around the impact of these moves on economic growth and the resulting decline in oil demand.
US Federal Reserve chief Jerome Powell also signalled further rate hikes during the year, while ECB (European Central Bank) President Christine Lagarde said there would likely be another increase in interest rates in July.
Oil prices rose on Wednesday, after the Energy Information Administration (EIA) said US commercial crude inventories had contracted by 9.6 million barrels in the week ended June 23, much higher than expectations of a decline of 4.8 million barrels. On Tuesday, the American Petroleum Institute had reported a decline of 2.4 million barrels in US crude inventories last week.
WTI crude for August delivery climbed $1.86, or around 2.8%, to end the trading day at $69.56 per barrel on the NYMEX (New York Mercantile Exchange). This marked the highest settlement since June 21. August Brent crude added $1.77, or about 2.5%, to close at $74.03 per barrel on ICE Futures Europe.
What to watch: Investors will watch supply cuts by the OPEC+ (Organization of the Petroleum Exporting Countries and allies), with Saudi Arabia announcing plans to make a big reduction to its output in July.
Markets will also monitor the global economic growth outlook, which is expected to significantly impact oil demand during the year.
Context: US equity markets closed mixed on Wednesday as investors digested recent comments from Federal Reserve Chairman Jerome Powell.
Details: At the ECB Forum, Powell signalled two more interest rate hikes this year. He also said inflation levels could remain much higher than the central bank’s 2% target until 2025. Traders widely expect the US central bank to hike its benchmark rate by 25 basis points at the July policy meeting.
US officials are reportedly considering new restrictions on AI chips to China, exerting significant pressure on semiconductor stocks, which ended Wednesday’s session with losses of around 0.9%.
On the economic data front, US trade deficit in goods shrank to $91.1 billion in May, from $97.1 billion in the prior month. Wholesale inventories declined 0.1% in May, after a 0.3% decline in April.
Of the three major US stock indices, Nasdaq 100 was the only one to end the session in the green on Wednesday, driven by gains in the shares of Tesla, Google-parent Alphabet and Apple. The Nasdaq 100 gained 0.12% to close at 14,964.58.
The S&P 500 settled slightly lower by 0.04% at 4,376.86, while the Dow Jones decline by 0.22% to close at 33,852.66, amid a decline in healthcare stocks.
What are expectations: Traders await the release of economic data on GDP growth, jobless claims and PCE prices from the US today. The US economy is expected to grow by an annualised 1.3% in the first quarter, while initial jobless claims are projected to increase to 266,000 in the latest week, from 264,000 in the week ending June 17.
Analysts expect the core price index for personal consumption expenditures to rise by an annualised 5% in the first quarter.
Other Markets: European indices closed higher on Wednesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.52%, 0.64%, 0.98% and 0.70%, respectively.
The US State Department condemned the recent missile attacks by Russia in Ukraine. The news sent the safe-haven US dollar index higher this morning.
Australia’s retail sales grew by 0.7% to A$35.52 billion in May, surpassing market estimates of 0.1% growth and lending support to the AUD/USD forex pair.
Vietnam’s retail sales rose 6.5% year-over-year in June. This marked a slowdown from the 11.5% growth recorded in the prior month and sent the VND/USD pair lower in forex trading this morning.
New Zealand’s ANZ Business Outlook Index rose to -18.0 in June, from -31.1 in the previous month. This being the highest reading since November 2021 lent support to the NZD/USD forex pair.
Japan’s retail sales jumped 5.7% year-over-year in May, accelerating from the 5.1 % increase in the previous month. This sent the JPY/USD pair higher in forex trading this morning.
Spain’s consumer price inflation and industry confidence indicator, South Africa’s consumer confidence and producer prices, UK’s mortgage approvals, mortgage lending, consumer credit and net lending to individuals, Eurozone’s economic sentiment indicator, industry confidence indicator, selling price expectations, services confidence indicator, consumer confidence indicator and consumer inflation expectations index, Brazil’s IGP-M inflation, net payrolls and producer prices, Canada’s CFIB Business barometer long-term optimism index and average weekly earnings, Germany’s inflation rate, US continuing jobless claims, corporate profits, pending home sales and natural gas stocks change, Argentina’s consumer confidence indicator and current account, as well as Australia’s CoreLogic home value index.
ADSS
8th floor, CI Tower
Corniche Road
PO Box 93894
Abu Dhabi
United Arab Emirates
Trading Services
ts@adss.com
+971 2 657 2414
Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.
ADS Securities LLC (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates as a trading broker for Over the Counter (“OTC”) Derivatives contracts and foreign exchange spot markets. ADSS is a limited liability company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.
The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.
ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.
