Crude Oil Lower; Stimulus Next Likely Catalyst
Investing.com
Published Aug 14, 2020 09:52AM ET
By Peter Nurse
Investing.com -- Crude oil prices edged lower Friday, after disappointing retail sales data raised doubts about the strength of the U.S. economic recovery. That said, the market still looks set to end the second consecutive week higher.
U.S. July retail sales increased 1.2% from the prior month, slowing sharply after an upwardly revised 8.4% gain in June, according to Commerce Department data released Friday.
By 10:50 AM ET (1450 GMT), U.S. crude futures were down 0.1% at $42.22 a barrel, while the global benchmark Brent was down 0.2% at $44.88 a barrel.
These levels still represent gains for the week, with the U.S. contract currently set to rise 2.2% and the Brent contract just under 1% this week.
Prices had hit a five-month high on Wednesday after the U.S. Energy Information Administration confirmed a bigger-than-expected fall in inventories of crude, gasoline and other distillates last week.
“This is now the third consecutive week of stock declines, with inventories declining by almost 22.5MMbbls over this period,” said analysts at ING, in a research note to investors.
This prolonged reduction in inventories has helped to balance out bearish reports from both OPEC and the IEA this week. Both of these organisations cut their demand estimates for the last two quarters of this year.
“This week’s inventory data was supportive, but the next significant catalyst that the market is focused on could be the U.S. coronavirus stimulus package,” Stephen Innes, chief global market strategist at AxiCorp Ltd., said in a note, reported by Bloomberg.
That said, the market may have to wait a while for that catalyst, with Senate Majority Leader Mitch McConnell officially sending senators home Thursday for a three-week summer recess, deeming an immediate deal between the two warring factions unlikely.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.