OPEC members and other producers including Russian Federation did not manage to reach an agreement on freezing supply at a meeting held in Doha in April. While Saudi output typically peaks in summer, the record output also reflects the country’s ongoing strategy of keeping its production high despite plummeting prices.
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Oil prices continued to fall on Wednesday (Aug 10), driven in part by elevated USA crude inventories and Saudi Arabia’s record oil production.
RETAIL THERAPY: Retailers were among the biggest laggards. The stock added $4.08 to $26.53.
Expectations for higher crude demand in the second half of 2016, coupled with a decrease in availability, are leading analysts to conclude the current bear market is only temporary, and oil prices will rise later in the year, he said.
Oil prices rose as much as 1 percent on Wednesday in anticipation the United States government would report a weekly drop in crude and gasoline stockpiles, tempering glut worries heightened by Saudi Arabia’s record high oil output. Kohl’s also fell, shedding $1.30, or 3.3 percent, to $38.07.
Market intelligence firm Genscape reported a build of more than 307,000 barrels at the Cushing, Oklahoma delivery hub for WTI futures in the week to August 5, traders said, even as analysts forecast in a Reuters poll a total USA crude inventory drop of 1 million barrels. Brent crude futures LCOc1 rose 36 cents, or almost 1 percent, to $45.34.
ANALYST’S TAKE: “News that OPEC would be having a September meeting with certain members keen to push for supply cuts again served as the impetus for oil prices to rally”.
In economic releases, the total volume of home sales plunged 10.1 percent year-over-year in July, reversing a 6.0 percent climb in the previous month, although median house prices climbed further, the Real Estate Institute of New Zealand said.
This comes as OPEC member Venezuela tries to drum up support for a producer meeting to decide measures that would buoy oil prices.
Japan’s Nikkei 225 added 0.1 percent to 16,786.03 and South Korea’s Kospi added 0.2 percent to 2,046.57.
Home furnishing store Wayfair slumped 19.6 percent after posting a wider-than-expected loss in the second quarter.
In Europe, Germany’s DAX rose 2.5 percent, while France’s CAC 40 gained 1.2 percent. Brent crude, used to price worldwide oils, was down 41 cents, or 0.9 percent, to $44.98 per barrel in London.
The pan-European FTSEurofirst 300 index .FTEU3 slipped 0.3 percent after five days of gains. Royal Caribbean Cruises slid $4, or 5.4 percent, to $69.98, while Carnival lost $1.01, or 2.2 percent, to $45.48. Hong Kong’s Hang Seng index traded flat, reversing earlier gains. The news came a day after China reported exports fell in July, and increased investors’ expectations of more stimulus measures from Beijing to soften the economy’s slowdown. Stocks in Taiwan and Singapore were higher but markets in China, Indonesia and New Zealand declined.
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The dollar fell sharply against a basket of currencies, with the euro rising to $1.118 and the yen falling to 101.13.
