OIL PRICE: ABOVE $67 YET
BLOOMBERG - A day after oil was swept up in a global market rout, crude is rebounding as investor focus snaps back to U.S. supplies.
Futures in New York rose as much as 1.3 percent, after being dragged down 1.2 percent in the previous session as a flight from risk shook assets around the world. While equity markets are clawing back on calls to 'buy the dip,' crude's advance is being driven by industry data that showed an unexpected decrease in U.S. stockpiles. Investors are watching if government data also surprises with a decline when it's released on Wednesday.
As calm returns to markets, Goldman Sachs Group Inc. stuck to its bullish call on commodities, saying the recent global selloff only bolsters its view that raw materials are set to perform well in months ahead. Still, crude is struggling to extend last month's gains that were largely driven by a weaker dollar, on speculation that U.S. output will impede efforts by OPEC and its allies to curb a glut.
"What's happening in the U.S. has become critical to the oil market, whether it's inventories and production figures or the movement in the greenback," Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone from Seoul. "While oil prices are likely to be supported at this level after its correction, the upcoming U.S. data will be the deciding factor" for future prices.
West Texas Intermediate for March delivery rose as much as 79 cents to $64.18 a barrel and traded at $63.88 as of 11:39 a.m. in Singapore. The contract fell 76 cents to $63.39 on Tuesday. Total volume traded was about 16 percent above the 100-day average.
Brent for April settlement rose 46 cents to $67.32 a barrel on the London-based ICE Futures Europe exchange, snapping a three-day decline. The global benchmark crude traded at a premium of $3.73 to April WTI.
The American Petroleum Institute was said to report U.S. crude stockpiles slid 1.05 million barrels last week, with storage also shrinking at tanks in the key hub of Cushing, Oklahoma. Nationwide inventories probably rose by 3.15 million barrels, according to a Bloomberg survey before a report from the Energy Information Administration due Wednesday.
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REUTERS - A consortium of western companies and Russia’s Gazprom that is due to build the controversial subsea Nord Stream 2 gas pipeline to Germany said on Tuesday it was starting preparatory work in the Greifswald bay off Germany’s Baltic coast.
GAZPROM - The parties reviewed the issues of cooperation in the energy industry, focusing on, inter alia, substantial growth in Russian gas exports to Austria. According to preliminary data, from January 1 through May 14, 2018, Gazprom delivered to Austria 4.7 billion cubic meters of gas, an increase of 70.4 per cent from the same period of last year.
FRB - Industrial production rose 0.7 percent in April for its third consecutive monthly increase. The rates of change for industrial production for previous months were revised downward, on net; for the first quarter, output is now reported to have advanced 2.3 percent at an annual rate.
WNN - Rosatom, the Russian state nuclear corporation, signed a series of agreements with overseas companies during the Atomexpo conference and exhibition being held this week in Sochi, Russia. The agreements, with Chile, China, Cuba, Finland, Hungary, Iran, Italy, Kazakhstan, Saudi Arabia, Serbia, Spain and Zambia, include the engineering and medical sectors, among others.