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: Crude oil recorded gains on Wednesday after upbeat remarks from a top official in China.
What happened: Traders had been concerned about the disappointing recovery of the Chinese market even after the easing of covid-19 restrictions.
Prospects of strong demand for crude from the world’s second-largest importer lent support to oil prices on Wednesday.
Why it matters: Crude oil has been under pressure due to the tepid recovery in the Chinese economy.
Upbeat comments from China’s Vice Premier He Lifeng lent support to oil prices on Wednesday. Lifeng said China’s economic development is showing “sound momentum” in the first half of the year, according to Xinhua, the country’s state news agency.
Strong demand in Asia for Middle Eastern crude and Federal Reserve Chairman Jerome Powell’s testimony before the Congress also sparked a rally in oil prices during Wednesday’s session.
Powell said US inflation rate remains well above the central bank’s target and further rate hikes are likely this year. Last week, the Fed had kept interest rates unchanged at its latest meeting. Powell signalled two more rate hikes this year.
Weakness in the US dollar, which makes oil cheaper for holders of other currencies, also provided support to crude.
China’s biggest oil and gas producer, CNPC, lowered its projections for crude oil demand this year, while recent economic data also showed a decline in China’s energy imports for May.
US crude oil stockpiles contracted by 1.246 million barrels in the week ended June 16, following a gain of 1.024 million barrels in the prior week and much worse than market estimates of a decline of 0.433 million barrels.
WTI crude for August delivery gained $1.34, or 1.9%, to settle at $72.53 per barrel on the NYMEX (New York Mercantile Exchange), while August Brent crude gained 1.6% to close at $77.12 per barrel on ICE Futures Europe. Both crude oil contracts had surged to a two-week high earlier in the session on Wednesday.
What to watch: Traders will watch the EIA’s (Energy Information Administration) data on crude oil stockpiles today. US crude oil inventories, which climbed the most in 17 weeks by 7.919 million barrels in the week ending June 9, are expected to increase by just 0.329 million barrels in the latest week.
Context: European markets closed lower on Wednesday, as investors digested higher-than-expected inflation data from the UK.
Details: The UK released its inflation data on Wednesday, which showed annual headline consumer price inflation coming in unchanged at 8.7% in May from the previous month. The figure was higher than the market estimates of 8.4%.
UK’s inflation data remained significantly above than the Bank of England’s target of 2.0%, increasing prospects of the central bank hiking interest rates by 50 basis points at today’s meeting.
UK’s producer inflation slowed to 2.9% year-over-year in May, from 5.2% in the prior month.
London’s FTSE 100 index declined by 0.13% to settle at 7,559.18 on Wednesday, extending losses for the third straight session.
The STOXX Europe 600 Index fell 0.5% to close at 457.01 on Wednesday, with most sectors closing in the negative zone. Tech stocks were among the worst performers, down around 1.6% on, following concerns over global growth. Oil and gas stocks bucked the overall market trend, gaining about 1%.
Germany’s DAX 40 fell 0.55% to 16,023.13, while France’s CAC 40 lost 0.46% to close at 7,260.97.
What are expectations: Investors await economic data on Eurozone’s consumer confidence indicator. Analysts expect the consumer confidence indicator in the Eurozone to improve further to -17 in June, from the previous month’s reading of -17.4. The ECB’s General Council meeting will also remain in focus.
Other Markets: US trading indices closed lower on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.30%, 0.52% and 1.35%, respectively.
Ukraine’s President Volodymyr Zelensky acknowledged “slower than desired” progress in the battlefield. Despite the ongoing conflict, the safe-haven US dollar declined slightly this morning.
New Zealand reported a trade surplus of NZ$46 million in May, compared to a year-ago surplus of NZ$148.2 million, lending support to the NZD/USD forex pair.
Brazil’s central bank held its key Selic rate at 13.75% for the seventh straight meeting, which sent the BRL/USD pair lower in forex trading this morning.
Russia’s producer prices fell by 3.6% year-over-year in May, following a 12.7% decline in the prior month, which lent support to the RUB/USD forex pair.
Canada’s new home prices rose by 0.1% in May, following a 0.1% decline in April, which sent the CAD/USD pair higher in forex trading this morning.
Saudi Arabia’s balance of trade, France’s manufacturing climate indicator and business climate indicator, Indonesia’s loan growth and Bank Indonesia interest rate decision, Turkey’s foreign exchange reserves and Central Bank of Turkey’s interest rate decision, UK’s interest rate decision, Mexico’s consumer prices and Bank of Mexico interest rate decision, US current account, initial jobless claims, Chicago Fed National activity index, continuing jobless claims, Fed Chair Powell testimony, existing home sales, CB leading index, Kansas City Fed’s manufacturing production index, as well as Argentina’s leading economic index, gross domestic product and unemployment rate.
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.
