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What’s happening: Crude oil settled higher on Thursday, amid news of supply disruptions in Libya.
What happened: Iraq looking to cut oil output added to the concerns around disruptions in Libya, stroking speculations of a tightening market.
Investors also monitored the latest economic reports from the US, which also provided a boost to oil prices.
Why it matters: Libya announced that operations at five key export terminals had been halted, which reduced the country’s oil production by more than half. News of a pause on oil exports at various ports fuelled concerns around a significant decline in global supply.
Iraq also announced plans to slash its oil output next month to compensate for producing above the quota agreed with the OPEC+ (Organization of Petroleum Exporting Countries and its allies). Iraq is expected to reduce its oil output to between 3.85 million and 3.9 million barrels per day in September.
US GDP growth came in slightly better than expected in the second quarter, supporting investor sentiment. Despite this, the Federal Reserve is widely expected to begin cutting its benchmark interest rates in September, which lent further support to oil prices.
Some strength in the US dollar limited the overall gains for oil, as a higher greenback makes commodities more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, added around 0.24% to reach 101.34 on Thursday.
Meanwhile, the EIA said on Thursday that natural gas stockpiles in the US had grown for the second week, rising 35 billion cubic feet in the week ended August 23, 2024.
WTI crude oil futures gained $1.39 to $75.91 per barrel, while Brent crude rose $1.24 to close at $78.82 per barrel on Thursday.
In other energy trading, gasoline rose more than 2% to $2.1077 a gallon, while heating oil surged to $2.3126 a gallon and natural gas rose around 1.7% to settle at $2.137 per million British thermal units.
What to watch: Investors await the release of data on Baker Hughes crude oil rigs. Crude oil rigs in the US came in unchanged at 483 in the week ending August 23.
Markets will continue monitoring oil price expectations released by analysts, with Goldman Sachs and Morgan Stanley recently slashing their oil price outlook for 2025.
Context: European stocks settled higher on Thursday, as softer inflation reports increased prospects of interest rate cuts by the ECB.
Details: Germany’s annual inflation rate slowed to 1.9% in August, from 2.3% in July. The figure also came in below estimates of 2.1%. Prices in Spain also fell more than projected, with EU-harmonised inflation easing to 2.4% in August, from 2.9% in the prior month.
The latest data increased speculations of the European Central Bank lowering interest rates again next month.
Tech stocks were among the top performers during Thursday’s session, as investors shrugged off weakness in the shares of US chipmaker Nvidia, following the release of quarterly results.
Shares of Delivery Hero jumped more than 12% on Thursday, after the German company reported upbeat growth it its gross merchandise value in the second quarter.
The STOXX Europe 600 Index gained 0.76% to close at 524.57 points on Thursday, slightly short of setting a new high. The STOXX 600 has added around 10% from the six-month lows recorded earlier in August. Germany’s DAX 40 climbed 0.69% to a record high of 18,912.57.
London’s FTSE 100 gained 0.43% to 8,379.64, while France’s CAC 40 added 0.84% to settle at 7,640.95.
What to watch: Investors await the release of economic data on inflation rate and unemployment rate from the Eurozone today. The Eurozone’s annual inflation rate, which rose to 2.6% in July, is expected to ease to 2.2% in August. Analysts expect the bloc’s unemployment rate to remain at 6.5% in July.
Other Markets: US trading indices closed mixed on Thursday, with the S&P 500 and Nasdaq 100 down by 0.01% and 0.13%, respectively, and the Dow Jones index up by 0.59%.
Russian President Vladimir Putin has plans of visiting Mongolia on September 3, which would be his first trip to an ICC (International Criminal Court) member country since a warrant for his arrent was issued due to the war in Ukraine. The news sent the RUB/USD pair higher in forex trading this morning.
Japan’s industrial production rose by 2.8% in July, rebounding from a 4.2% decline in the earlier month, which lent support to the JPY/USD forex pair.
Australia’s private sector credit rose by 0.5% in July, compared to 0.6% growth in the prior month, sending the AUD/USD pair higher in forex trading this morning.
New Zealand’s ANZ Roy Morgan consumer confidence index climbed to 92.2 points in August, from 87.9 in the prior month. Consumer sentiment surging to the strongest level since February lent support to the NZD/USD forex pair.
Singapore’s bank loans fell to S$801.2 billion in July, from S$803.6 billion in the earlier month, which sent the SGD/USD pair lower in forex trading this morning.
France’s payroll employment in the private sector, inflation rate, GDP Growth rate, household consumption and producer prices, Japan’s construction orders, Germany’s retail sales, import prices, number of unemployed individuals and jobless rate, South Africa’s money supply M3, balance of trade, private sector credit and government budget value, Spain’s retail sales, current account and consumer confidence, UK’s net consumer credit, net mortgage approvals, net borrowing of mortgage debt, money supply M4 and net lending to individuals, Italy’s inflation rate, manufacturing confidence index and consumer confidence index, India’s foreign exchange reserves, infrastructure output, GDP growth rate and central government budget value, Canada’s CFIB business barometer, GDP growth and government budget value, Brazil’s unemployment rate and government budget value, US core PCE price index, personal income, personal spending, Chicago business barometer, and University of Michigan consumer sentiment, as well as Russia’s money supply M2.
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