Hello commodity steemit traders,If you trade the commodties like I do,let us do some oil news analysis,varieties they say is the spice of life....
Surplus control has been the main shortcomings on oil prices. WTI crude oil contract jumped to a 8-week high of 48.66 before settling at 47.89, up 3.35%. The Brent contract rose above 50 for the first time since June and closed at 50.2, up +3.29%.Oil explorer gaint-Anadarko Petroleum signal cutting capital spending plans while Saudi Arabia pledged to reduce exports was the trigger on the slight bullish movement.The company would lower capital spending by about US$ 300M this year,the first big company to announce CAPEX reduction, smaller companies in West Texas' Permian Basin have intended to pull back due to lack of cashflow. For instance, Byrd Operating Co., Fasken Oil & Ranch and Green Century Resources have indicated that they would be selling property, pulling rigs from the field or backing away from drilling projects
Saudi Arabia has planned to cut exports to 6.6M bpd, down 1M bpd from a year ago, in August. The pledge was followed by UAE with its energy minister Mohamed al-Mazrouei announcing that state-owned Abu Dhabi National Oil Company will cut its crude exports by about 10% in September. While Nigeria and Libya are still exempted from the output cut deal, the two countries promised to limit outputs after which have reached a certain level.
API reported huge declined in US inventory. Crude oil inventory slumped -10.2M bpd in the week ended July 21.The EIA report, due today, probably shows a -2.63 mmb decline in crude oil inventory. Gasoline and distillate storage probably slipped +-0.61 mmb nad -0.45 mmb, respectively.
For the rest of the day, the focus is undoubtedly the FOMC meeting announcement. The Fed would leave the policy rate unchanged but the key is whether the Fed would turn more dovish on the inflation outlook which might affect the future normalization path. The market consensus remains that there would be one more rate hike in December, which was signaled in the June dot plot. However, more and more voices of doubt about the implementation due to recent disappointment on the data front. Another focus is whether the Fed would announce the kickoff period of the balance sheet reduction plan.
Your comments are welcome especially on FED’s FOMC meeting today.What are your perspective on the interest rate dot plot and its effects on commodity prices.
To Your Success…………