An Echelon Media Company
Wednesday June 23rd, 2021
International news

US oil prices in ‘bear’ market as Dow rises again

AFP – The decline in the oil market came as Wall Street stocks rallied for a second straight session on dovish commentary from the Federal Reserve and as European bourses climbed modestly ahead of a European Central Bank meeting.

The decline in oil prices followed a hefty build in commercial crude inventories, according to weekly Department of Energy data that also showed domestic production continuing to rise.

"The feeling is that there is a lot of crude oil and of petroleum products," said Kyle Cooper of IAF Advisors. "Economic data suggests slowing demand growth."

US benchmark West Texas Intermediate for July delivery finished at $51.69 per barrel, down $1.80 and more than 20 percent off its recent peak in April, technically a "bear market." The European benchmark Brent oil is also close to a bear market.

A report released Wednesday by Morgan Stanley slashed its oil price forecast, citing a "sharper-than-expected slowdown in demand."

On Tuesday, the World Bank cut its 2019 economic growth forecast, citing ongoing trade conflicts as a leading factor. 

– Stocks rally –

But Wednesday’s market performance suggests a silver lining in the weakening outlook, at least for equity investors.

US stocks finished solidly higher for a second straight day following more dovish Fed commentary, including from Chairman Jerome Powell, who on Tuesday acknowledged the economic risks connected to trade wars and said the Fed was willing to act if needed to support growth.

"The Fed’s dovish shift has been the main driver behind the bullish sentiment but since we still haven’t seen any progress being made on the trade standoff with China, volatility could still return," said a note from Gorilla Trades strategist Ken Berman.

Powell’s comments helped investors overlook a tepid report on US private-sector hiring. The more closely-watched US Labor Department report will be released on Friday.

Investors are also looking ahead to Thursday’s gathering of the European Central Bank.

The euro declined against both the dollar and the pound ahead of the meeting as investors bet ECB Chief Mario Draghi would signal further accommodation amid a tepid outlook. 

"Investors are hoping, or betting even, that the European Central Bank’s Mario Draghi will deliver a dovish press conference on Thursday, pushing rate hike expectations further out," said Fawad Razaqzada at

– Key figures around 2035 GMT –

New York – Dow: UP 0.8 percent at 25,539.57 (close)

New York – S&P 500: UP 0.8 percent at 2,826.15 (close)

New York – Nasdaq: UP 0.6 percent at 7,575.48 (close)

London – FTSE 100: UP 0.1 percent at 7,220.22 (close)

Frankfurt – DAX 30: UP 0.1 percent at 11,980.81 (close)

Paris – CAC 40: UP 0.5 percent at 5,292.00 (close)

EURO STOXX 50: UP 0.2 percent at 3,339.95 (close)

Tokyo – Nikkei 225: UP 1.8 percent at 20,776.10 (close)

Hong Kong – Hang Seng: UP 0.5 percent at 26,895.44 (close)

Shanghai – Composite: FLAT at 2,861.42 (close)

Euro/dollar: DOWN at $1.1225 from $1.1252 at 2100 GMT Tuesday

Pound/dollar: DOWN at $1.2686 from $1.2698 

Euro/pound: DOWN at 88.47 pence from 88.60 pence 

Dollar/yen: UP at 108.43 yen from 108.15 yen 

Oil – Brent Crude: DOWN $1.34 at $60.63 per barrel

Oil – West Texas Intermediate: DOWN $1.80 cents at $51.68 per barrel

Leave a Comment

Your email address will not be published. Required fields are marked *

Your email address will not be published. Required fields are marked *


Leave a Comment

Your email address will not be published. Required fields are marked *

Your email address will not be published. Required fields are marked *