A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, Aug. 9, 2016.
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Oil prices fell on Wednesday on a surprise build in USA crude inventories, dragging on energy shares, and Wall Street stocks receded from record highs.
Seoul shares closed on a flat note as the rally in crude oil prices stalled and weak US productivity data tempered investor optimism stemming from last week’s upbeat jobs report. Asian stock markets were little changed Tuesday after Wall Street closed almost flat a.
USA stock indexes edged higher in early trading Tuesday, following gains in global stock markets as slack Chinese consumer price figures stoked expectations of more stimulus.
Speculation on a potential meeting on market co-operation between Opec and other oil producers also fizzled after disinterest shown by non-Opec member and top oil exporter Russian Federation, traders said.
In Europe, Germany’s DAX rose 2.5 percent, while France’s CAC 40 gained 1.2 percent.
Oil futures seesawed Wednesday, with USA crude trading about 0.5 percent higher, after briefly falling more than 1 percent, ahead of the Energy Information Administration’s weekly inventories data release.
U.S. West Texas Intermediate (WTI) crude slipped by 5 cents to US$42.97 percent per barrel. The July figure is the third monthly drop in a row since April, when the consumer price index reached its highest level since July 2014. The contract fell 25 cents, or 0.6 percent, to close at $42.77 per barrel on Tuesday, ending a rally after the US government raised the forecast on domestic crude production.
A monthly report from the Organization of Petroleum Exporting Countries showed Saudi Arabian oil production at almost 10.5 million barrels per day in July. It is unusual for the OPEC to come together outside of their regularly set gatherings and the report pushed up the price of crude oil overnight.
Crude inventories rose 1.1 million barrels in the week ended August 5, compared with analysts’ expectations for a decrease of 1.0 million barrels, the U.S. Energy Information Administration (EIA) said.
After his declaration, Brent crude, the global benchmark for oil, surged from $42 to $45.33 a barrel – almost a three percent increase.
An informal meeting of OPEC member countries is scheduled to take place on the sidelines of the 15th International Energy Forum which will take place in Algeria from 26 to 28 September 2016. In Asia, the Shanghai composite fell 0.23 percent, while the Nikkei 2225 dropped 0.18 percent. Stocks in Australia, Indonesia and Taiwan remained almost unchanged.
CURRENCIES: The dollar fell to 101.44 yen from 101.94 yen while the euro strengthened to $1.1147 from $1.1113.
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The agency now expects USA oil output to fall by 700,000 barrels per day (bpd) this year to 8.73 million bpd, compared with the 820,000-bpd drop it previously forecast.
