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U.S. crude futures remain near 6-yr lows, as oversupply concerns weigh
CommoditiesAug 17, 2015 06:23PM GMT
WTI crude fell below $42 on Monday, while brent crude dipped below $49
Investing.com --
futures fell considerably on Monday amid a stronger dollar, hovering
near six year lows as energy traders remained concerned with record
levels of oversupply on the global markets.
On the New York Mercantile Exchange, WTI crude for October delivery
traded between $42.27 and $43.20 a barrel, before settling at $42.32,
down 0.78 or 1.82% on the session. Last week, Texas Long Sweet futures
fell more than 2% to its lowest level since 2009, amid a continuing gulf
in supply and demand levels worldwide.
On the Intercontinental Exchange (ICE), brent crude for October
delivery wavered between $48.36 and $49.44 a barrel, before closing at
$48.70, down 0.49 or 1.00% on the day. The spread between the
international and U.S. benchmarks of crude stood at $6.38, below
Friday's level of $6.58 at the close.
Crude prices unexpectedly fell in the final hour of Monday's trade
upon the expiration of September options. In recent weeks, September
crude options had fallen approximately $20 off their high from June
trading and $10 from their peak in July as oil prices suffered its
second severe downturn on the calendar year. A number of traders
expected to see a spike in call options on Monday before expiry.
Investors now await the expiration of September crude futures on
Wednesday.
As crude prices continue to linger at its lowest levels in years,
investors have expressed little optimism that the current supply-demand
imbalance can be corrected in the short-term. Last week, the U.S. Energy
Information Administration (EIA) lowered supply growth estimates for
the remainder of the year to 650,000 barrels per day, below prior
forecasts of a 750,000 bpd. The Energy Department's supply forecasts
still exceed demand growth expectations of 400,000 bpd, which remained
unchanged.
OPEC, meanwhile, increased its crude production by 100,000 bpd in
July to 31.5 million bpd, even as Saudi Arabian output fell mildly. Last
November, OPEC triggered a prolonged battle for market share with the
U.S. by keeping its production ceiling above 30 million bpd.
By next year, the EIA expects U.S. crude output to decline by 400,000
bpd from prior forecasts of a 150,000 bpd reduction. In terms of demand
growth, the EIA anticipates increased growth of 190,000 bpd, up from
previous estimates of 130,000 bpd. Crude prices have fallen sharply by
60% since peaking above $100 a barrel last summer, as supply continues
to outstrip demand.
The ,
which measures the strength of the greenback versus a basket of six
other major currencies, rose more than 0.25% to an intraday high of
96.84 in U.S. afternoon trading. The dollar moved broadly higher after
the National Association of Home Builders said its Housing Market Index
for July rose modestly for the month, in line with analysts'
expectations.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.
Wall Street ends up after bullish housing data
Stock MarketsAug 17, 2015 08:05PM GMT
© Reuters. Traders, company executives and guests gather for the IPO of Houlihan Lokey, Inc., on the floor of NYSE
NEW YORK (Reuters) - U.S. stocks rose on Monday after strong
economic data boosted the housing sector and as investors bought
recently battered shares in biotech and media.
The Dow Jones industrial average () rose 67.92 points, or 0.39 percent, to 17,545.32, the S&P 500 () gained 10.92 points, or 0.52 percent, to 2,102.46 and the Nasdaq Composite () added 43.46 points, or 0.86 percent, to 5,091.70.
Germany's Schaeuble gives strong backing to Greek bailout
EconomyAug 17, 2015 06:27PM GMT
© Reuters. German Finance Minister Schaeuble speaks during the session of Germany's parliament, the Bundestag, in Berlin
By Noah Barkin and Andreas Rinke
BERLIN (Reuters) -
German Finance Minister Wolfgang Schaeuble said on Monday he had no
qualms about urging fellow lawmakers to approve a new bailout for Greece
in a parliamentary vote on Wednesday, citing a dramatic change in the
Greek government's readiness to reform.
In a robust endorsement
that could help Chancellor Angela Merkel's grand coalition win broad
backing for the bailout, Schaeuble said he was confident that the
International Monetary Fund, whose imprimatur many lawmakers see as
guaranteeing rigorous implementation of budgetary and reform targets,
would take part.
Schaeuble argued last month that Greece should
consider a "timeout" from the euro zone, drawing criticism from some
euro zone partners and solidifying his credentials among bailout
skeptics in his party as an opponent of leniency.
"I can argue
with full conviction, partly because I haven't taken this decision
lightly myself ... that the right thing to do is to vote for this,"
Schaeuble said in an interview with the German public broadcaster ZDF.
Schaeuble
called existing loan terms to Greece "very generous". He said steps
could be taken to reassure the IMF on the sustainability of Greece's
debts and ensure its involvement.
"I am very sure that we will
come to a common assessment and I am also sure that the IMF, whose role
we have described as indispensable, will take part in this program."
Asked if a Greek exit from the euro was now off the table, Schaeuble said this was up to Greece.
"If
Greece does everything that we have agreed, then this program is
designed over the next three years to bring Greece back onto a
sustainable path," he said. "Greece should then be able to fund itself
on the financial markets without guarantees from the European rescue
fund."
Earlier, sources involved in party talks told Reuters that
conservative lawmakers largely supported the new bailout plan but that
top party officials wanted to be sure the IMF would take part -
something that Merkel tried to reassure them of on Sunday.
The Bundestag is due to vote on the 86 billion euro ($95 billion) aid package on Wednesday.
Germany's
approval of the deal is not in doubt because of the support of parties
such as the Social Democrats, Merkel's junior coalition partner, and the
opposition Greens.
But a rebellion by a large number of
lawmakers from her Christian Democratic Union (CDU) and its Bavarian
sister party, the Christian Social Union (CSU), would be a blow to her
authority.
Last month, a record 65 lawmakers from Merkel's
conservative camp broke ranks and refused to back negotiations on the
bailout. The daily Bild estimated that up to 120 CDU and CSU members out
of 311 might refuse to back the deal now agreed.
