It’s looking like being a quiet end to the trading week, with the only notable economic releases coming from Canada and it being one of the less eventful days of earnings season. The Canadian inflation figures will be one interesting takeaway today, after a year in which the central bank has been actively raising interest rates, most recently this month taking the number of hikes to four.
It appears that Saudi Arabia is saying "enough is enough" when it comes to the correction in crude oil and wants to set the record straight, just one day after an unscheduled Joint Ministerial Monitoring Committee with all the OPEC and Non-OPEC conspirators, Saudi Arabia wanted the market to know that they were not flooding the market with oil.
If you want 11 million reasons to be optimistic about America, you might want to start with counting barrels of crude oil. The Energy Information Administration (EIA) reported that U.S. crude oil production exceeded 11 million barrels a day for the first time in history. Not too many years ago, that would have seemed to have been impossible by many who lacked the imagination and drive of those in the U.S. energy industry.
Crude prices got whacked on oil supply, real and imagined. Talk of futures strategic petroleum reserve releases along with signs of real increases of production in some OPEC countries sent oil into the basement. Weak economic data out of China and some warnings about trade wars by the International Monetary Fund did not help and it overshadowed the reality that U.S. oil supplies will probably fall dramatically again this week.
The world’s oil-consuming nations are showing growing unease about the rapidly tightening global crude oil market and are considering releasing oil from their strategic petroleum reserves. On Friday, Bloomberg News reported that the Trump Administration is reviewing options ranging from a 5 million-barrel test sale to the release of 30 million barrels from its oil reserve to cool pump prices ahead of congressional elections in November and as sanctions on Iran are due to snap back.
The biggest crude oil draw since 2016 was not enough to stop oil from a major drop in price. A slew of oil supply side stories includes the resumption of Libyan crude exports, an increase in Saudi Arabia crude output, possible waivers on U.S. sanctions on Iranian oil and reports that oil is on the agenda when President Donald Trump and Russian President Vladimir Putin meet next month.
The deadline has passed. President Donald Trump fired the trade war shot heard around the world as he suggests the United States is mad as heck and isn’t going to take the record $375 billion trade deficit with China in 2017 anymore. Around $34 billion in tariffs went into effect at midnight with China calling it the start of the largest trade war in history and retaliating by adding $34 billion dollars of its own tariffs.
U.S. investors, out celebrating July 4 holidays, didn’t miss much at all yesterday in the markets. They are back today and with them, volatility is set to return. In fact, European stock markets have started sharply higher this morning although the forex markets have been fairly quiet so far as investors await key U.S. data releases later on in the afternoon, which should provide us vital clues about Friday’s key employment report. Depending on the outcome of today’s data, the dollar could start to move more meaningfully ahead of the jobs report on Friday.
Hail to the tweet! President Donald Trump is calling out OPEC and telling them now is the time to lower prices. The tweet this time had less of an oil price impact from previous tweets, as many are starting to realize OPEC can’t do much. The President tweeted that “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two-way street. REDUCE PRICING NOW!”
Oh, say can you tweet, by the dawn’s early light? The global oil markets are still rolling after President Donald Trump tweeted that maybe the Saudis had agreed to increase output by as much as two million barrels to help replace Iranian supply that the Trump Administration wants to see at zero by early November.