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Tag: Brent Crude Oil (Dec'20)

  • CNBC Daily Open: Oil joined the July stocks rally

    CNBC Daily Open: Oil joined the July stocks rally

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    Pumpjack near school buses, Arvin, Kern County, California, USA.

    Citizens Of The Planet | Universal Images Group | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Digesting data
    U.S. markets     traded higher Monday as all three major indexes edged up. Asia-Pacific markets were mostly higher Tuesday. Hong Kong’s Hang Seng Index was near flat as advance estimates showed the city’s second-quarter gross domestic product contracting 1.3% quarter on quarter. Meanwhile, Australia’s S&P/ASX 200 rose around 0.7% as the central bank kept interest rates unchanged at 4.1% for the second straight month.

    Intrigue in India
    Investors are growing interested in India as the country’s economy expands and stock market rallies — even amid high inflation. “Whatever the world is grappling with, it’s business as usual for India,” said Feroze Azeez, deputy CEO of Anand Rathi Wealth. Here are four sectors analysts think are the most appealing for investors.

    HSBC’s humongous profit
    HSBC reported second-quarter earnings that easily beat analysts’ expectations. Pre-tax profit of the largest bank in U.K. jumped 89% year-on-year to $8.77 billion, while revenue surged 38% to $16.71 billion. In light of those sterling results, HSBC’s board announced they’re planning to initiate a share buyback of up to $2 billion.

    New filing against JPMorgan Chase
    JPMorgan Chase handled more than $1.1 million in payments from Jeffrey Epstein to “girls or women” even after the bank says it removed the sex offender as a client in 2013, a lawyer for the U.S. Virgin Islands told a judge Monday. The Virgin Islands alleges that JPMorgan facilitated and financially benefited from Epstein’s sex trafficking of young women.

    [PRO] Benefiting from bankruptcies
    Corporate insolvencies in the U.K. have been rising in recent months. While it’s bad news, obviously, for those bankrupt firms, two global stocks stand to gain from the trend — analysts expect one of them to pop 31% over the next 12 months.

    The bottom line

    A soft landing — where inflation cools while the U.S. economy, labor market and corporate earnings continue growing — is, of course, good news for markets.

    Traders think that scenario is looking increasingly likely. Stocks inched up Monday. The S&P 500 added 0.15%, the Dow Jones Industrial Average rose 0.28% and the Nasdaq Composite advanced 0.21%.

    That gave all indexes a rosy July. For the month, the S&P climbed 3.1%, its fifth consecutive month of gains. The Dow jumped 3.4% after experiencing a 13-day rally, its longest since 1987. The Nasdaq Composite popped 4.1%, its first five-month streak in more than two years.

    The optimism extended to the commodities market. The promise of higher economic activity, after all, raises demand for the raw input needed to keep the world moving, literally.

    Oil prices had their best month since January 2022, when both Brent crude and West Texas Intermediate crude added more than 17.2%. As of publication time, October Brent futures were trading at $85.19 per barrel and the September WTI contract at $81.6 per barrel.

    Metal prices are climbing as well. Prices for aluminum and zinc rose 2.7%. Copper — typically seen as an indicator of economic activity because it’s used in most parts of the economy — is at its highest since May 1, putting it on track to have its best month since January.

    Rocketing stock prices might not necessarily, or directly, have effects on the cost of eggs in grocery stores, for example. But a hot commodities market nudges up prices in the real world.

    That’s the difficult balancing act the Federal Reserve has to contend with: As a soft-landing scenario becomes more plausible, renewed economic activity might, ironically, make inflation harder to suppress.

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  • CNBC Daily Open: July was great for stocks — and oil

    CNBC Daily Open: July was great for stocks — and oil

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    Oil pump jack on Great Plains, southeastern Wyoming.

    Marli Miller | Universal Images Group | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Tepid markets
    U.S. markets     traded higher Monday as all three major indexes edged up slightly after a winning week. Europe’s regional Stoxx 600 index eked out a 0.12% increase on the back of a dip in inflation and higher-than-expected economic growth in the euro zone.

    Upbeat euro zone figures
    The euro zone reported positive economic data Monday. Inflation in July was 5.3%, 20 basis points lower than June’s reading. Separate data showed that the continent’s gross domestic product grew 0.3% in the second quarter, higher than the 0.2% forecast. That figure was mostly boosted by Ireland’s economy, which expanded 3.3% during the period.

    Tighter lending conditions
    For the second half of 2023, U.S. banks expect to tighten standards for all loan categories, according to the Federal Reserve’s Senior Loan Officer Opinion Survey. That means credit limits might lower, and auto loans might be harder to get. In the commercial and industrial lending segment, banks are already seeing less demand for loans.

    New filing against JPMorgan Chase
    JPMorgan Chase handled more than $1.1 million in payments from Jeffrey Epstein to “girls or women” even after the bank says it removed the sex offender as a client in 2013, a lawyer for the U.S. Virgin Islands told a judge Monday. The Virgin Islands alleges that JPMorgan facilitated and financially benefited from Epstein’s sex trafficking of young women.

    [PRO] Where’s the S&P 500 going?
    The S&P 500 has rallied a remarkable 20% in seven months and is only around 200 points away from its all-time high. CNBC Pro’s Bob Pisani explains what drove the S&P to such heights, and where the index is going for the final five months of the year.

    The bottom line

    A soft landing — where inflation cools while the U.S. economy, labor market and corporate earnings continue growing — is, of course, good news for markets.

    Traders think that scenario is looking increasingly likely. Stocks inched up Monday. The S&P 500 added 0.15%, the Dow Jones Industrial Average rose 0.28% and the Nasdaq Composite advanced 0.21%.

    That gave all indexes a rosy July. For the month, the S&P climbed 3.1%, its fifth consecutive month of gains. The Dow jumped 3.4% after experiencing a 13-day rally, its longest since 1987. The Nasdaq Composite popped 4.1%, its first five-month streak in more than two years.

    The optimism extended to the commodities market. The promise of higher economic activity, after all, raises demand for the raw input needed to keep the world moving, literally.

    Oil prices are poised to have their best month since January 2022, when both Brent crude and West Texas Intermediate crude added more than 17.2%. At publication time, Brent’s up 14.23% and WTI’s 15.8% for the month. (It’s still the last day of July in the U.S. because of time zone differences.)

    Metal prices are climbing as well. Prices for aluminum and zinc rose 2.7%. Copper — typically seen as an indicator of economic activity because it’s used in most parts of the economy — is at its highest since May 1, putting it on track to have its best month since January.

    Rocketing stock prices might not necessarily, or directly, have effects on the cost of eggs in grocery stores, for example. But a hot commodities market nudges up prices in the real world.

    That’s the difficult balancing act the Federal Reserve has to contend with: As a soft-landing scenario becomes more plausible, renewed economic activity might, ironically, make inflation harder to suppress.

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  • OPEC+ sticks to 2023 oil production targets as Saudi Arabia announces further voluntary cuts

    OPEC+ sticks to 2023 oil production targets as Saudi Arabia announces further voluntary cuts

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    Saudi Minister of Energy Prince Abdulaziz bin Salman al-Saud arrives for the Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna on June 3, 2023.

    Joe Klamar | Afp | Getty Images

    The influential Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, on Sunday made no changes to its planned oil production cuts for this year, as coalition chair Saudi Arabia announced further voluntary declines.

    OPEC+ also announced in a statement that it will limit combined oil production to 40.463 million barrels per day over January-December 2024.

    Previously, the alliance agreed to a 2 million barrels-per-day decline in October. Some OPEC+ members also announced some voluntary drops of just over 1.6 million barrels per day in April. Russia’s Deputy Prime Minister Alexander Novak said Sunday that all voluntary cuts, which were initially set to expire after 2023, will now be extended until the end of 2024, in comments reported by Reuters.

    Asked whether Russia, hit by Western sanctions, will carry out its pledge to cut output, UAE oil minister Suhail al-Mazrouei on Sunday acknowledged there were discrepancies between figures supplied by Moscow and the independent Russian production estimates of analysts and trade publications.

    “Some of the things that we have seen from Russia on a technical basis just … [don’t] add up from some of the independent sources, and we will be reaching out to those independent sources,” he said during a press briefing after the OPEC+ meeting.

    Saudi Arabia’s energy ministry said Riyadh will implement an additional voluntary one-month 1 million-barrel-per-day cut starting this July, which can be extended. This will bring the kingdom’s total voluntary declines to 1.5 million barrels per day over the period, reining in its production to 9 million barrels.

    The Saudi energy minister described the kingdom’s additional 1 million barrel-per-day voluntary reduction as a “Saudi lollipop” and stressed it will implemented.

    “We have always honored our commitments,” he said during the Sunday press briefing. He left unanswered whether the kingdom will extend its voluntary reduction beyond July.

    The move by the 23-country alliance follows contentious talks that dragged well into the night on Saturday, as well as a more-than four-hour Sunday meeting of the alliance’s Joint Ministerial Monitoring Committee, which recommends, but does not implement, policy.

    At stake for OPEC+ is a battle to reconcile an outlook of tighter supply in the second half of the year, current macro-economic and inflationary concerns, and intergroup diplomacy.

    Ahead of the meeting, Saudi oil minister Prince Abdulaziz bin Salman in late May warned oil market speculators to “watch out,” in a comment widely read as heralding another supply cut.

    It remains to be seen if the 2024 reduction in output will offer long-term support to current oil futures prices when markets open on Monday, following months of pressure from global financial turmoil since the start of the year.

    Brent futures most recently settled at $76.13 per barrel on Friday, with several OPEC+ delegates noting the deepening divide between prices and supply-demand fundamentals.

    Back to bases

    The producers’ alliance also agreed to review baselines — the starting level from which producers cut their output during OPEC+ agreements, usually by a similar percentage — for 2025, following a study of countries’ output capacities by oil analysts IHS, Wood Mackenzie and Rystad Energy.

    A higher baseline translates into a higher output ceiling. Critically, baselines are often reused in new iterations of OPEC+ agreements and their review and later adjustment are often contentious, meaning they could bind producers longer term.

    OPEC heavyweight UAE has been long vying for an upward revision to its baseline, receiving part of such a concession in July 2021.

    Other producers of the alliance, such as Angola and Nigeria, have meanwhile long fallen short of lifting their output to their assigned OPEC+ quotas amid sabotage, depleting capacity and underinvestment — but potential changes to their baselines to reflect these realities were not formally broached before because of the sensitivity of these discussions, delegates told CNBC.

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