The only interest in the markets remain focused on oil prices which recovered sharply ahead of the Christmas holiday only to give back gains as traders returned afterwards.
The only interest in the markets remain focused on oil prices which recovered sharply ahead of the Christmas holiday only to give back gains as traders returned afterwards.
Crude oil is trading at 36.83 while Brent oil is at 36.68 on Tuesday morning. Asia’s stocks swung between gains and losses amid reduced volumes as investors count down to the end of a turbulent year for the region’s markets. Gold rose as the dollar weakened and industrial metals in London retreated amid renewed concern about China’s slowing economy, FX Empire reports.
West Texas Intermediate swung between gains and losses. The contract slumped 3.4 percent in New York Monday as Iran’s plans to add supply as soon as it is allowed scuttled last week’s rally. WTI for February delivery slipped $1.29 to settle at $36.81 a barrel on the New York Mercantile Exchange. The volume of all New York oil futures traded was more than 50 percent below the 100-day average Monday, says analyst Barry Norman.
U.S. natural gas futures advanced 1.4 percent Tuesday. They surged 10 percent yesterday, a third straight increase, amid forecasts for an end to unseasonably warm conditions that had curbed demand for heating fuel. Trading volumes were down for both contracts in the post-holiday period. Only about 5,000 WTI contracts have changed hands so far during this trading session on Monday versus 8,953 contracts at this point in the trading session on December 7. The US market tightened slightly in December following reduced drilling activity, withdrawals from near record crude stockpiles and the prospect of crude exports following a 40-year export ban.
"The biggest adjustment to prices comes from WTI gaining premium over the Brent. This was mainly followed by the US lifting its ban on crude oil exports," Singapore-based Phillip Futures said on Monday. The brokerage added that it expected "a quiet week ahead" with the biggest expected news for energy markets likely coming from U.S. inventory data to be published on Wednesday and Thursday.
While the US slightly tightened, international markets remain over supplied as producers like Russia and the Organization of the Petroleum Exporting Countries (OPEC) produce between half a million and 2 million barrels of crude every day in excess of demand. At the same time, developed and emerging economies especially in Asia are slowing.
Oil held losses on December 29 as Saudi Arabia announced a budget that reflects scaled-back revenue expectations and lower spending as the world's biggest exporter copes with plunging prices.
Futures were little changed in New York after dropping 3.4 per cent on Monday. OPEC's most powerful member announced it will cut government spending next year as the nation's revenue is projected to drop by more than 15 percent. The kingdom's 2016 budget is probably based on crude prices of about $29 a barrel.
The global glut that's sent West Texas Intermediate crude toward its second yearly decline may deepen after the Organization of Petroleum Exporting Countries effectively abandoned output limits this month. Brent, the benchmark for more than half the world's oil, is poised to end 2015 with the lowest annual average price in 11 years, hurting energy- exporting countries and companies.
