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What’s happening: Crude oil prices moved higher on Wednesday as investors assessed the latest inventories data.
What happened: Data released on Wednesday showed US crude stockpiles contracting for the sixth straight week, providing a boost to oil prices.
Investors also continued to monitor the recovery in global equities and the geopolitical scenario.
Why it matters: Crude prices moved higher on Wednesday, along with global equity markets, which recovered after a sharp selloff earlier in the week. Concerns around the US economy’s growth and geopolitical worries had hurt investor risk sentiment.
Prices of commodities fell sharply earlier in the week. Brent crude prices closed Monday’s session at its weakest level since early January, while WTI crude closed at its lowest level in around six months. Both oil benchmarks snapped a three-day losing streak on Tuesday.
Late Tuesday, the API (American Petroleum Institute) said US crude inventories had grown by 180,000 barrels last week.
The Energy Information Administration said on Wednesday that US crude inventories contracted by 3.7 million barrels in the week ended August 2, compared to market estimates of a drawdown of 700,000 barrels.
However, gasoline stockpiles rose by 1.3 million barrels and distillate supplies grew by 900,000 barrels last week. Markets were expecting gasoline stockpiles to decline by 2.4 million barrels and distillates to contract by 700,000 barrels.
Trade data from China, the largest crude importer in the world, showed a decline in daily crude oil imports in July, reaching the lowest level since September 2022.
Some strength in the US dollar limited the overall gains for crude on Wednesday. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose more than 0.2% to 103.20.
WTI crude for September delivery added $2.03 to close at $75.23 per barrel on the NYMEX (New York Mercantile Exchange), while October Brent crude rose $1.85 to settle at $78.33 per barrel on ICE Futures Europe.
In other energy trading, September gasoline gained 3 cents to $2.36 a gallon, while September heating oil rose 6 cents to $2.36 a gallon on Wednesday. Natural gas for September delivery added 10 cents to $2.11 per million British thermal units.
What to watch: Investors await the release of EIA data on natural gas stockpiles today. US natural gas supplies had increased by 18 billion feet to 3,249 billion cubic feet during the week ended July 26.
Rising geopolitical concerns and crude demand from China will also remain in focus.
Context: Shares of Walt Disney fell on Wednesday, despite the company reporting better-than-expected quarterly results.
Details: The company’s combined streaming business, including Disney+, Hulu, and ESPN+, recorded a profit for the first time. Disney had earlier projected its streaming business to turn profitable starting in the fourth quarter. However, the company’s streaming unit swung to an operating profit of $47 million, versus a year-ago loss of $512 million.
Walt Disney’s overall quarterly revenues grew by 4% year-over-year to $23.16 billion, surpassing consensus estimates of $23.11 billion. Adjusted earnings came in at $1.39 per share, topping Wall Street expectations of $1.20 per share.
Entertainment revenues rose by 4% year-over-year to $10.58 billion, amid an increase in subscription revenue growth. Sports revenues climbed 5% to $4.56 billion, while Experiences revenues gained 2% year-over-year to $8.39 billion.
Revenues from US parks and experiences rose 3% to $5.82 billion, while international sales grew 5% to $1.60.
Management raised the third-quarter guidance for adjusted earnings growth to 30%, from the prior forecast of 25%. They also projected a modest growth in Disney+ Core subscribers.
How shares responded: Walt Disney’s shares fell 4.5% to close at $85.96 on Wednesday, following the release of quarterly results. The stock has added around 12% over the past month.
What to watch: Investors will continue monitoring price hikes from Disney, as the company announced plans on Tuesday to increase prices for its streaming platforms beginning in October.
Other Markets: European indices closed higher on Wednesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 1.75%, 1.50%, 1.91% and 1.54%, respectively.
Russia announced a local state of emergency in areas close to the border in the southern Kursk region after Ukrainian soldiers crossed the border near the Sudzha town. The news sent the RUB/USD slightly higher in forex trading this morning.
Japan’s current account surplus widened to ¥1,533.5 billion in June, from ¥1,519.4 billion in the year-ago month, lending support to the JPY/USD forex pair.
UK’s RICS Residential Market Survey house price balance declined to -19% in July, versus a reading of -17% in the prior month. The region’s house price balance tumbling to the weakest level since December 2023 sent the GBP/USD pair lower in forex trading this morning.
Canada’s Ivey Purchasing Managers Index fell to 57.6 in July, from 62.5 a month ago. However, the region’s economic activity remaining in the expansion zone lent support to the CAD/USD forex pair.
Singapore’s foreign exchange reserves grew to S$506.4 billion in July, from S$503.7 billion a month ago, sending the SGD/USD pair higher in forex trading this morning.
South Africa’s manufacturing production, Turkey’s gross foreign exchange reserves, Mexico’s inflation rate and Bank of Mexico’s interest rate decision, US initial jobless claims, continuing jobless claims and wholesale inventories, as well as Argentina’s industrial production.
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