Oil slips toward $60 on US inventory rise but trade hopes support

OPEC and Russia boosted production in August, according to a Reuters survey and Russian energy ministry figures. (Reuters)
Updated 05 September 2019

Oil slips toward $60 on US inventory rise but trade hopes support

  • US crude stockpiles rose by 400,000 barrels last week, while analysts had expected a fall
  • China’s commerce ministry said Beijing and Washington agreed to hold high-level trade talks in early October

LONDON: Oil slipped toward $60 a barrel on Thursday after a report showed US crude inventories rose unexpectedly, although hopes of progress in resolving the US-China trade row lent support.
The American Petroleum Institute (API), an industry group, on Wednesday said US crude stockpiles rose by 400,000 barrels last week, while analysts had expected a fall. The government’s official supply report is due out later on Thursday.
Benchmark Brent crude was down 25 cents at $60.45 a barrel by 0821 GMT, while US West Texas Intermediate (WTI) crude fell 39 cents to $55.87.
“Oil prices remain range-bound despite yesterday’s rally,” said OANDA analyst Craig Erlam. “API reported a modest increase in inventories on Wednesday, which failed to do much for oil prices.”
Crude had gained more than 4 percent on Wednesday as positive Chinese economic data sparked a wider market rally. On Thursday, China’s commerce ministry said Beijing and Washington agreed to hold high-level trade talks in early October.
The prolonged trade dispute has been a dampener on oil prices but Brent is still up 12 percent this year, helped by production cuts led by the Organization of the Petroleum Exporting Countries and its allies including Russia.
Nonetheless, both OPEC and Russia boosted production in August, according to a Reuters survey and Russian energy ministry figures, weighing on prices.
Also putting downward pressure on prices has been mounting evidence of slowing economic growth worldwide, which has prompted analysts to lower forecasts for oil demand growth.
BP Chief Financial Officer Brian Gilvary said on Wednesday that global oil demand was expected to grow by less than 1 million barrels per day in 2019, a slowing from previous years.
Later on Thursday, attention will focus on US government weekly inventory figures from the Energy Information Administration to see if they confirm API’s view on inventory changes. The EIA report is due out at 1500 GMT.
Analysts expect crude stocks fell by 2.5 million barrels in the week to Aug. 30.


KSE-100 remains bullish after IMF mission recommended second tranche for Pakistan

Updated 11 November 2019

KSE-100 remains bullish after IMF mission recommended second tranche for Pakistan

  • Statistics show the stock market has given a return of 14.10 percent since July 1
  • Analysts believe Pakistan’s external position is comfortable now

KARACHI: Pakistan’s KSE-100 index continued its bullish steak for eighth consecutive sessions as it surged by 2.24 percent on Monday, witnessing a spike of 825 points, in the wake of the recommendation issued by the International Monetary Fund’s Pakistan mission to release the second tranche of $450 million for the South Asian country that is still grappling with economic challenges.
The longest bullish spell in a year was witnessed at the Pakistan bourse following “easing political noise, MSCI emerging market status quo and IMF affirmations over the achievement of First Quarter Performance Criteria by good margins,” Ahsan Mehanti, senior equity analyst, commented.
After the first review of the overall economic performance of the country under the IMF’s $6 billion bailout program, the Fund on Friday declared that the Pakistani authorities had met all performance criteria with comfortable margins.
Following the performance review, Pakistan and the IMF reached a staff-level agreement that paved the way for the second tranche of $450 million that the country expects in December this year.
Analysts say that amid the bullish spell, the equity market’s benchmark KSE 100 Index has witnessed a surge of about 7000 points from its lows. They add that the stock market has given a return of 14.10 percent since July 1.
“The external position of Pakistan seems comfortable now. The political tension has also defused, national saving scheme (NSS) rate cut and IMF review have played a vital role in putting the market on an upward trajectory,” Samiullah Tariq, Director Research at Arif Habib Limited, told Arab News.
On Monday, the market volumes increased from 210.6 million to 283 million shares, contributed mostly by banks, cement firms and the technology sector.
Pakistan’s capital markets are said to be attractive for foreign investors who had spent $675 million in treasury bills (T-Bills) and $3 million in Pakistan Investment Bonds (PIBs) by November 11, 2018.
However, the equity market witnessed outflows of $30 million since July 2019, according to the State Bank of Pakistan (SBP) and AHL Research.
During the past eight sessions, the domestic equity bourse rose by 9 percent or 3,042 points.
Previously, the market had exhibited such a trend on November 2, 2018, when it shot up by 11.4 percent or 4,289 points.