Crude oil prices take a breather after hitting 2016 highs
Published 2016-04-28 08:10:40| Amwal Al Ghad English
Crude futures pulled back from 2016 highs on Thursday as traders locked in profits after April's sharp rally, but analysts said falling U.S. production, strong investor appetite and a weakening dollar could push prices higher soon. International Brent crude futures were trading at $46.91 per barrel at 0638 GMT, down 27 cents from their last settlement. U.S. West Texas Intermediate (WTI) futures were down 20 cents at $45.13 a barrel. The dips came after both benchmarks rose on Wednesday to their highest levels for 2016 in what has been one of the steepest price increases in recent years. Both Brent and WTI have rallied more than 70 percent since their respective 2016 lows in January and February. Record crude storage figures may have spurred some investors to take profits on Thursday by closing long positions, traders said, and government data on Wednesday showed that U.S. crude stocks climbed 2 million barrels last week to an all-time peak of 540.6 million barrels. Despite the price falls, analysts said that sentiment had clearly turned bullish, and that further price rises were likely. "We ... appear to be at the beginning of a bull market," U.S. investment bank Jefferies said on Thursday. Analysts said falling output in the United States, where Energy Aspects said there were now even "murmurings of volumes falling short" of demand, and a weak dollar were supporting prices and attracting investors. "The recent trend of rising crude oil prices received another boost after U.S. output was shown to have fallen again last week," ANZ bank said, following a release by the U.S. Energy Information Administration (EIA) showing that crude oil production fell to 8.94 million barrels per day (bpd) last week, down almost half a million bpd from this time last year. While Jefferies said it expected the market to remain oversupplied in the near term, it said that crude inventories should begin to fall by the third quarter, "setting the stage for a fundamental recovery". Analysts said that further bullish momentum could emerge due to ongoing weakness in the dollar, which is down almost 6 percent this year against a basket of other leading currencies, as a weaker greenback makes dollar-traded crude cheaper to buy for countries using other currencies at home. The Federal Reserve said Wednesday that it would leave U.S. interest rates unchanged, while the bank of Japan said Thursday it would hold back from expanding stimulus. Jefferies also warned that global spare capacity, estimated around 2 million bpd, or 2 percent of demand, was "precariously low" given the frequency of unexpected disruptions recently, including pipeline interruptions and strikes, as well as "the dire fiscal situation of producers like Venezuela, Iraq and Nigeria."
- Gold climbs to two-month high on Trump policy uncertainty, dollar drop
- Oil eases after 2-day gain, rising US production weighs
- Dollar starts week on back foot as Trump policy detail awaited
- Dollar vs Egyptian pound at early Sunday interbank in 17 banks
- Mexico’s peso strengthens against US dollar after Trump speech
- Gold futures hold gains after inaugural address
- Oil ups 2% ahead of producers' compliance meeting
- Dollar mixed after Trump's inauguration speech
- Gold under pressure as Fed's Yellen backs gradual rate hikes
- Oil climbs from 1-week low, US inventory data in focus
Get To Know
Among their many differences, the U.S. Republicans and the Democrats have widely divergent ideas about taxes. Here’s what the parties and their candidates have said about this topic, which is near and dear to the hearts of many voters. The Republican party tax platform The Republican platform states that tax rates that penalize thrift or discourage investment must be lowered, and rules that discourage economic growth must be changed. The platform calls for eliminating unspecified special interest-loopholes while being mindful of the tax burdens that are imposed on families with children and an aging population. That’s typical boilerplate stuff. Specific proposals More specific proposals include: Making the Internal Revenue Code so simple and easy to understand that the IRS can be abolished. Removing all marriage penalties from the Tax Code. Repealing the Affordable Care Act, and the tax increases that it imposed (such as the 3.8% Medicare surtax on net investment income of higher-income individuals). Considering all options to preserve Social Security without tax increases. Reducing the corporate tax rate to be level with or below the rates charged by other industrialized nations. Adopting a balanced budget amendment that would require a super-majority for tax increases. Opposing any carbon tax. Republican presidential nominee Donald Trump aimed to cast himself as the only candidate who can deliver economic change in a speech Monday in Detroit. Watch the highlights. The Trump tax plan Donald Trump has proposed fewer tax brackets and lower rates for most individuals: 12%, 25% and 33% (versus the current rates of 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%). Rates on long-term capital gains and dividends would be 0%, 15%, and 20%. He has also pitched a proposal to allow families to deduct child-care expenses, however details are lacking. Trump would abolish the federal estate tax and the alternative minimum tax. Some individual write-offs would be curtailed, but itemized deductions for home mortgage interest and charitable donations would be retained under the current rules. Trump would cut the corporate tax rate from the current 35% to 15%, but eliminate tax deferral on overseas profits. The 15% rate would also apply to business income from sole proprietorships and income passed through to individuals from businesses conducted as S corporations, LLCs, and partnerships. Trump would impose a cap on business interest deductions. He would repeal the Affordable Care Act and the tax increases that it imposed.
Gold prices rose on Monday to the highest in two months as investors sought safer assets amid uncertainty around the economic policies of new U.S. President Donald Trump. The dollar declined against other major currencies. Spot gold rose 0.7 percent, to $1,217.81 per ounce by 0303 GMT. It earlier touched a high of $1,219.43, the most since Nov. 22. U.S. gold futures were up 1.1 percent, to $1,218.20 at 0303 GMT. The dollar index, which measures the greenback against a basket of currencies, fell for a second day by 0.4 percent to 100.310.
The Market Quotes Powered By Forexpros, the Forex, Futures, and Stock Markets Portal.