Oil prices decline halts on Wednesday and stays near the same level as April lows. Traders are waiting for the release of EIA weekly report on crude inventories in the US which is projected to show a reduction in crude supplies in the US storages.
The report is due on 10:30 ET 3rd August. It is predicted that the report will to show oil shrinkage in the reserves by 1.4M barrels, drop in gasoline reserves – by 0.2M barrels and a fall in distillate and diesel stockpiles – by 482K barrels. Preliminary data from American Petroleum Institute indicates that the crude inventories in the US should have dropped by 1.3M barrels in the week ending 29th of July. The gasoline reserves decreased by 450K barrels while distillates and diesel fuel rose by 539K barrels.
The crude prices remain on a declining pace amid the falling demand for oil by the US refineries. For this time of the year, they are suffering from the high volumes of unusually high gasoline and other liquid fuel stockpiles. The rally is also held back by apprehensions by the OPEC cartel and non-OPEC producers as they keep increasing the production, bringing up surplus oil issues. According to the OPEC information bulletin, aggregate production of OPEC members rose to 33.41M b/day in July.
The WTI found their bottom at $39.30 per barrel after a sharp decline on Tuesday; Brent dived to $41.55 per barrel. On Wednesday both benchmarks pared down abrupt declines as a part of a temporary correction, which focused on the EIA crude inventory figures, WTI rose by +0.89% at 39.86; Brent rose by +0.81% at 42.14.
The US Dollar edges up after dipping to five-week low at 95.00 points yesterday. The US Personal Expenses rose by 0.4% in June, which was faster than expected. The household expenses rose by 0.4%, while the Personal Income rose by 0.2% vs. 0.3% expected. The bearish pressure on the US currency hikes as the Dallas FED head Robert Kaplan said during the Beijing Lecture that the FED should exercise caution considering the rate hikes. Taking into account the risks global economy faces with.
Unexpectedly low GDP figures for 2Q were posted last week (1.2% actual vs. 2.5% exp.), which triggered a downward trend for the US currency. Experts are sure that this will make the FED stay on the fence for the rest of the year.
The USD/JPY bounced above 101 after tumbling to a three-week low of 100.60 points. According to the market reaction, the Japanese currency unwinds after the Japanese government announced the rather poor stimulus deal. The package included 13.5 trillion Yen intended for fiscal measures and 7.6 trillion Yen for direct expenses.
The EUR/USD stalls around a 1.12 level, GBP/USD by 1.3350 before the BoE decision tomorrow.Publication source