OIL PRICE: ABOVE $56
REUTERS, BLOOMBERG, OILPRICE - Oil prices came under pressure from a strong dollar, but kept most of their gains from the previous session as major producers meeting in Vienna said the market was well on its way towards rebalancing.
The Organization of the Petroleum Exporting Countries, Russia and several other producers have cut production by about 1.8 million barrels per day (bpd) since the start of 2017, helping lift oil prices by about 15 percent in the past three months.
Kuwaiti Oil Minister Essam al-Marzouq, who chaired Friday's meeting of the Joint Ministerial Monitoring Committee, said output curbs were helping cut global crude inventories to their five-year average, OPEC's stated target.
London Brent crude for November delivery was down 8 cents at $56.78 a barrel by 0614 GMT, near the highest since March. U.S. crude for November delivery was down 15 cents at $50.51, but not far off recent four-month highs.
The dollar index was up 0.2 percent against a basket of currencies. The euro slipped after Germany's election showed surging support for a far-right party that left Chancellor Angela Merkel scrambling to form a governing coalition.
Russia's energy minister said no decision on extending output curbs beyond the end of March was expected before January, although other ministers suggested such a decision could be taken before the end of this year.
Iran expects to maintain overall crude and condensate exports at around 2.6 million bpd for the rest of 2017, a senior official in the nation's state oil company said, while the UAE's energy minister said its compliance to supply cuts was 100 percent.
Nigeria is pumping below its agreed output cap, its oil minister said.
"Oil is relatively underpriced compared with other markets, but any steep rise would be offset by rising shale oil production," said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.
Production curbs have faced rising U.S. shale oil output. U.S. energy firms cut the number of oil rigs operating for a third week as a 14-month drilling recovery stalled.
Markets were also eyeing developments in North Korea. U.S. Treasury Secretary Steve Mnuchin on Sunday said President Donald Trump wants to avoid nuclear war with North Korea and "will do everything we can" to avoid conflict.
The WTI crude front month discount to the same month of Brent futures hit $6.28, the widest since August 2015, as U.S. crude was pressured by hurricane damage to U.S. refineries.
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IMF - Within the next few years, the U.S. economy is expected to enter its longest expansion in recorded history. The Tax Cuts and Jobs Act and the approved increase in spending are providing a significant boost to the economy. We forecast growth of close to 3 percent this year but falling from that level over the medium-term. In my discussions with Secretary Mnuchin he was clear that he regards our medium-term outlook as too pessimistic. Frankly, I hope he is right. That would be good for both the U.S. and the world economy.
IMF - The near-term outlook for the U.S. economy is one of strong growth and job creation. Unemployment is already near levels not seen since the late 1960s and growth is set to accelerate, aided by a near-term fiscal stimulus, a welcome recovery of private investment, and supportive financial conditions. These positive outturns have supported, and been reinforced by, a favorable external environment with a broad-based pick up in global activity. Next year, the U.S. economy is expected to mark the longest expansion in its recorded history. The balance of evidence suggests that the U.S. economy is beyond full employment.
U.S. FRB - Industrial production edged down 0.1 percent in May after rising 0.9 percent in April. Manufacturing production fell 0.7 percent in May, largely because truck assemblies were disrupted by a major fire at a parts supplier. Excluding motor vehicles and parts, factory output moved down 0.2 percent. The index for mining rose 1.8 percent, its fourth consecutive month of growth; the output of utilities moved up 1.1 percent. At 107.3 percent of its 2012 average, total industrial production was 3.5 percent higher in May than it was a year earlier. Capacity utilization for the industrial sector decreased 0.2 percentage point in May to 77.9 percent, a rate that is 1.9 percentage points below its long-run (1972–2017) average.
IMF - South Africa’s potential is significant, yet growth over the past five years has not benefitted from the global recovery. The economy is globally positioned, sophisticated, and diversified, and several sectors—agribusiness, mining, manufacturing, and services—have capacity for expansion. Combined with strong institutions and a young workforce, opportunities are vast. However, several constraints have held growth back. Policy uncertainty and a regulatory environment not conducive to private investment have resulted in GDP growth rates that have not kept up with those of population growth, reducing income per capita, and hurting disproportionately the poor.