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What’s happening: Crude oil prices rose more than 1% on Wednesday amid supply-related concerns.
What happened: The OPEC+ (Organization of the Petroleum Exporting Countries) decided to maintain its output policy at its latest ministerial meeting.
Meanwhile, a US federal court blocked the tariffs imposed by President Donald Trump, providing a boost to global risk appetite.
Why it matters: The OPEC+ agreed to keep its output policy unchanged at its latest meeting, indicating continued restraint. Investors had expected members of the OPEC+ to increase production.
Eight OPEC+ nations are scheduled to hold a separate meeting on Saturday to decide on a rise in oil production in July.
On Wednesday, the Court of International Trade ruled that Trump overstepped his authority in imposing broad tariffs and declared them unconstitutional, while also ordering their removal. Although the Trump administration is likely to appeal against the order, the decision helped ease some trade-related worries and provided a boost to the demand outlook for oil.
The US government blocked Chevron from exporting Venezuelan crude. The company is looking to slash around 800 jobs in Texas to lower its global workforce by up to 20% by the end of next year.
The American Petroleum Institute data showed that US crude stockpiles declined by 4.24 million barrels during the latest week.
Brent crude futures gained 81 cents, or 1.26%, to close at $64.90 per barrel on Wednesday, while WTI crude oil climbed 95 cents, or 1.56%, to settle at $61.84 a barrel.
In other energy trading, gasoline settled at $2.0632 a gallon, while heating oil closed at $2.0707 a gallon and natural gas at $3.557 per million British thermal units on Wednesday.
What to watch: Investors await the release of the EIA’s (Energy Information Administration) data on US crude oil stockpiles (2000 UAE Time) today. Crude oil inventories in the US, which increased by 1.328 million barrels in the week ended May 16, are expected to gain by 1 million barrels in the recent week.
Context: Equity markets in the US settled lower on Wednesday as investors digested the minutes from the Fed’s latest meeting.
Details: On Tuesday, the three major US stock indices had recorded sharp gains after Trump announced a delay in tariffs on imports from the European Union. The rally paused on Wednesday, with yields on longer-term Treasury bonds continuing to surge.
Shares of chip design software firms Cadence and Synopsys fell more than 10% after the companies received communication from the US Commerce Department barring them from selling to China.
Okta’s stock plunged more than 16% after the identity management software company maintained its full-year guidance, despite reporting better-than-expected results for the quarter. Management cited macro uncertainties for their cautious stance.
All major sectors on the S&P 500 closed on a lower note, with utilities and materials recording the biggest losses.
The Dow Jones index shed 244.90 points, or 0.58%, to close at 42,098.70 on Wednesday, while the S&P 500 fell 0.56% to settle at 5,888.55. The Nasdaq 100 declined by 0.45% to close at 21,318.17.
US stocks are expected to open on a strong note today, with Nasdaq futures jumping more than 2% this morning after Nvidia reported stronger-than-expected quarterly results.
What to watch: Investors await the release of economic data on US GDP growth rate (1630 UAE Time), initial jobless claims (1630 UAE Time) and core PCE prices (1630 UAE Time) today. The US economy is expected to contract at an annualized rate of 0.3% during the first quarter, following 2.4% growth in the previous quarter.
Initial jobless claims in the US, which fell by 2,000 from the previous week to 227,000 in the week ending May 17, are expected to increase to 230,000 in the latest week. Analysts expect core PCE prices to rise by 3.5% in the first quarter, up from 2.6% in the previous period.
Other Markets: European indices closed lower on Wednesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 0.59%, 0.78%, 0.49% and 0.61%, respectively.
Germany said it will help Ukraine make long-range missiles that can hit targets in Russia’s territory, while also announcing plans to provide further military aid worth €5 billion. The news sent the RUB/USD pair lower in forex trading this morning.
Australia’s total new capital expenditure unexpectedly fell by 0.1% in the first quarter. The figure coming in significantly lower than market estimates of a 0.5% gain exerted pressure on the AUD/USD forex pair.
New Zealand’s ANZ Business Outlook Index dipped to 36.6 in May, from 49.3 in April. The region’s business sentiment falling to its weakest level since July 2024 sent the NZD/USD pair lower in forex trading this morning.
The Bank of Korea cut its base rate by 25 basis points to 2.50% during its recent meeting, exerting pressure on the KRW/USD forex pair.
Brazil’s economy added 257,528 jobs during April, up from 71,576 job adds in the previous month. However, the BRL/USD pair fell in forex trading this morning.
Italy’s business confidence (1200 UAE Time), consumer confidence (1200 UAE Time), 10-year BTP auction (1310 UAE Time), 5-year BTP auction (1310 UAE Time) and industrial sales (1400 UAE Time), South Africa’s PPI (1330 UAE Time) and interest rate decision (1700 UAE Time), Brazil’s IGP-M inflation (1500 UAE Time), bank lending (1530 UAE Time) and unemployment rate (1600 UAE Time), Turkey’s foreign exchange reserves (1530 UAE Time), Canada’s current account (1630 UAE Time) and average weekly earnings (1630 UAE Time), US corporate profits (1630 UAE Time), continuing jobless claims (1630 UAE Time), GDP sales (1630 UAE Time), real consumer spending (1630 UAE Time), pending home sales (1800 UAE Time), 4-week Bill auction (1930 UAE Time), 8-week Bill auction (1930 UAE Time) and 7-year Note auction (2100 UAE Time), as well as Mexico’s monetary policy meeting minutes (1900 UAE Time).
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