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April 10 – Oil prices settled up USD 1 on Wednesday after three sons of a Hamas leader were killed in an Israeli airstrike in the Gaza Strip, feeding worries that ceasefire talks might stall.

Brent crude futures settled up USD 1.06, or 1.2%, to USD 90.48 per barrel while US West Texas Intermediate (WTI) crude futures settled up 98 cents, or 1.2%, to USD 86.21.

“The oil market has been and continues to be very reactive to news out of Gaza,” said John Kilduff, partner at Again Capital LLC in New York.

The Israeli military confirmed carrying out the attack, describing the three sons as operatives in the Hamas armed wing. On Tuesday, Hamas said it was studying an Israeli ceasefire proposal in the more than six-month-old Gaza war but called it was “intransigent” and said it met none of the Palestinian demands.

A continuing conflict could drag in other countries, particularly Hamas-backer Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC).

Mexico’s decision to curb crude exports in order to supply domestic refineries also supported prices and led to record-low US imports of Mexican crude in early April.

In early trade oil prices fell after US government data showed crude oil and fuel inventories swelled by much more than expected on weak demand and lower oil exports.

US crude stocks climbed by 5.8 million barrels in the week ended April 5, more than double the rise of about 2.4 million barrels analysts had expected. Refined products inventories rose unexpectedly with gasoline up by 700,000 barrels and distillate stocks by 1.7 million barrels.

The US Energy Information Administration (EIA) data also showed a roughly 2.1 million barrel per day (bpd) drop in oil product supplied, a proxy for fuel demand, and a 2.7 million bpd drop in crude oil exports.

“Some of the heat has come out of the rally in crude oil in the early part of this week on hopes of a ceasefire in Gaza and higher US inventories,” said Tony Sycamore, a market analyst at IG in Singapore.

Separately, the US EIA sharply raised its forecast for crude oil output. It anticipates an increase of 280,000 bpd to 13.21 million bpd in 2024, up from its earlier forecast of a 20,000 bpd increase.

The EIA said it expects Brent crude prices to average USD 88.55 a barrel in 2024, up from a previous forecast of USD 87, and it upgraded its demand growth forecast for the past two years.

“Broadly it reconfirmed an oil market outlook with OPEC+ in good control of the oil market,” SEB analyst Bjarne Schieldrop said.

OPEC’s monthly oil market report will be published Thursday, April 11 and the International Energy Agency’s oil market report will be published Friday, April 12.

(Additional reporting by Ahmad Ghaddar and Noah Browning in London and Andrew Hayley in Beijing; editing by Jason Neely, Christina Fincher, David Gregorio, and Barbara Lewis)

 

SINGAPORE, April 8 – Oil prices slipped 1% in early Asian trade on Monday as tensions in the Middle East eased after Israel withdrew more soldiers from southern Gaza and committed to fresh talks on a potential ceasefire in the six-month conflict.

Brent crude futures dropped 94 cents, or 1%, to USD 90.23 a barrel by 2253 GMT after hitting a session low of USD 90.01.

US West Texas Intermediate crude was at USD 86.01 a barrel, down 90 cents, or 1%, after falling to as low as USD 85.80.

Israel and Hamas sent teams to Egypt for fresh talks on a potential ceasefire ahead of the Eid holidays, easing tensions in the Middle East that drove up oil prices by more than 4% last week on concerns of supply disruption.

Israeli Defence Minister Yoav Gallant said on Sunday that Israel is ready to handle any scenario that may arise with Iran, after Tehran threatened to retaliate for the killing of Iranian generals on April 1.

The world’s top exporter, Saudi Arabia, raised official selling prices for all crude grades to Asia, in line with expectations.

US oil rigs rose two to 508 last week while gas rigs fell by two to 110, their lowest since Jan 2022, Baker Hughes said in its report on Friday.

(Reporting by Florence Tan; Editing by Stephen Coates)

 

April 8 – Asian markets on Monday aim to kick off a week jam-packed with top-tier local economic indicators and policy decisions in an optimistic mood, after another set of forecast-busting US job growth figures sparked a sharp rise on Wall Street on Friday.

The highlights on Monday’s Asian calendar are trade and current account figures from Japan, industrial production from Malaysia, and an interest rate decision in the Philippines.

Japan’s Nikkei 225 will be looking to bounce back from Friday’s 2% slide, which sealed a weekly loss of 3.4%, its biggest decline since December 2022. As ever, the exchange rate and threat of yen-supportive intervention from Tokyo will hold great sway over Japanese stocks.

The rebound in risk appetite in US trading on Friday was noteworthy as it came despite a spike in bond yields, a 4% weekly rise in oil prices to just under USD 92 a barrel, and a further erosion of US rate cut expectations.

Geopolitical tensions continue to bubble away too, pushing gold to a record high of USD 2,330 an ounce on Friday.

Will Wall Street’s feel-good factor extend into Asia on Monday, or will markets feel the squeeze? The signs point to equities in a period of consolidation at the highs rather than a profit-taking run for the hills.

The S&P 500 and MSCI World indexes registered their biggest weekly losses in three months in the face of rising bond yields, but they were less than 0.8%. The MSCI Asia ex-Japan index, which is sensitive to higher US yields, was even more resilient, basically ending the week flat.

Much of that resilience is down to improving economic numbers from China, and Beijing releases a batch of key indicators this week including lending, trade, and inflation.

US Treasury Secretary Janet Yellen has just completed a four-day visit to China. Yellen said that she and Chinese Vice Premier He Lifeng agreed to launch exchanges on “balanced” economic growth, an effort to address US concerns about China’s excess manufacturing capacity.

She also told Premier Li Qiang that bilateral relations were now more stable because the two sides can have “tough” discussions.

The Philippine central bank, meanwhile, is widely expected to keep its key policy rate on hold at 6.50% for a fourth meeting on Monday. Inflation picked up for the first time in five months in February, rising to 3.4%, and the central bank cautioned risks to the outlook remained toward the upside.

That suggests the Bangko Sentral ng Pilipinas (BSP) may be less inclined to reduce its rate ahead of major peers, notably the Fed. Seven out of 19 economists in a Reuters poll predict a 25 basis points cut to 6.25% either in May or June.

Here are key developments that could provide more direction to markets on Monday:

– Philippines central bank policy meeting

– Japan trade, current account (February)

– Malaysia industrial production (February)

(By Jamie McGeever; Editing by Bill Berkrot)

 

April 5 – Gold prices climbed on Friday to hit a fresh record high, as multiple factors including US interest rate cut bets, speculative buying, and central bank purchases kept bullion’s record rally active despite strong US job growth in March.

Spot gold gained 1.5% to USD 2,324.15 per ounce, as of 2:03 p.m. EDT (1803 GMT), after hitting a record high of USD 2,330.06 earlier in the session. Bullion rose over 4% this week and logged a third straight weekly gain.

US gold futures settled 1.6% higher to USD 2,345.4.

There are too many capital inflows and everybody is chasing the market high, which is helping gold prices along with strong central bank purchases and speculative buying, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

Meanwhile, nonfarm payrolls increased by 303,000 jobs last month, the Labor Department said in its employment report on Friday. Economists polled by Reuters had forecast 200,000 jobs, with estimates ranging from 150,000 to 250,000.

Fed Chair Jerome Powell reiterated on Wednesday that the central bank was in no rush to reduce borrowing costs after leaving its policy rate unchanged in the current 5.25%-5.50% range last month.

“At some point later this year with inflationary concerns remaining somewhat sticky, that remains an underlying positive environment for the gold market,” said David Meger, director of metals trading at High Ridge Futures.

Traders are currently pricing in an about 59% chance that the Fed will cut rates in June.

Lower interest rates reduce the opportunity cost of holding bullion.

“Some folks might have also had some short positions covered and then technicians took (gold) over the USD 2,300 resistance level,” said Bart Melek, head of commodity strategies at TD Securities.

Spot silver gained 1.6% to USD 27.37 per ounce. Platinum climbed 0.4% to USD 928.80. Both logged weekly rises.

Palladium dipped 2.2% to USD 999.00 and posted a weekly decline.

(Reporting by Anjana Anil in Bengaluru; Editing by Alan Barona)

 

April 4 – Oil prices extended gains on Thursday, settling up more than USD 1 as geopolitical tensions and output cuts outweighed caution about US Federal Reserve rate cuts.

Brent futures for June rose above USD 91 a barrel before settling up USD 1.30, or 1.5%, to USD 90.65. US West Texas Intermediate (WTI) futures for May settled up USD 1.16, or 1.4% to USD 86.59 a barrel.

Both contracts closed on Thursday at their highest levels since October and continued to climb after the session ended, having received support in recent days from heightened geopolitical tensions and potential supply risks.

Oil rose on Thursday following news reports that Israeli embassies across the world have been placed on high alert due to increasing threats of an Iranian attack on Israeli diplomats.

Iran, the third-largest producer in OPEC, has vowed revenge against Israel for an attack on Monday that killed high-ranking Iranian military personnel. Israel has not claimed responsibility for the attack on Iran’s embassy compound in Syria.

In a sharp shift in tone, Washington issued its strongest public rebuke toward Israel on Thursday since the start of its war with Hamas, warning that US policy on Gaza will be determined by whether Israel takes steps to address the safety of Palestinian civilians and aid workers.

The United States on Thursday imposed new Iran-related counter-terrorism sanctions against Oceanlink Maritime DMCC and its vessels, citing its role in shipping commodities on behalf of the Iranian military.

The United States is using financial sanctions to isolate Iran to disrupt its ability to fund its proxy groups and hamper the country’s support for Russia’s war in Ukraine, the Treasury Department said.

Prices were also supported after US Secretary of State Antony Blinken said that Ukraine will eventually join NATO as support for the country remains “rock solid” among member states.

Oil’s recent gains have also followed Ukrainian attacks on Russian refineries that cut fuel supply and news that Mexico’s state energy company Pemex requested its trading unit to cancel up to 436,000 barrels per day of crude exports this month as it prepares to process domestic oil at the new Dos Bocas refinery.

“All of these geopolitical factors happened at once, driving bullish sentiment and ultimately some profit taking,” said Frank Monkham, senior portfolio manager at Altimo LLC.

A meeting of top ministers from the Organization of the Petroleum Exporting Countries and its allies (OPEC+) including Russia, kept oil supply policy unchanged on Wednesday and pressed some countries to boost compliance with output cuts.

The group said some members would compensate for oversupply in the first quarter. It also said Russia would switch to output rather than export curbs.

Investors will look to economic data and monetary policy for potential clues on the outlook for oil demand.

US unemployment claims increased more than expected in the last week, according to Labor Department statistics, as labor market conditions gradually ease.

That came after Federal Reserve Chair Jerome Powell expressed caution on Wednesday about the timing of future interest rate cuts, after recent data has showed higher-than-expected job growth and inflation.

March’s employment report on Friday is likely to show nonfarm payrolls increased by 200,000 jobs in March after rising by 275,000 in February, according to a Reuters survey.

(Additional reporting by Robert Harvey and Paul Carsten in London, Laura Sanicola, and Sudarshan Varadhan; editing by Jason Neely, David Evans, Chris Reese, Tomasz Janowski, and Cynthia Osterman)

 

April 5 – A late and steep reversal on Wall Street on Thursday, sparked by comments from a US Fed official that interest rates may not be cut this year, appears to be souring the mood across Asia on Friday, despite a decline in the dollar and US bond yields.

The S&P 500 had been well in the green for most of Thursday but ended up clocking its biggest loss in nearly two months after Minneapolis Fed president Neel Kashkari’s remarks.

Asian stocks, however, have been pretty resilient lately. They may have lagged benchmark US, Japanese, and world indices on the upside this year, but it’s been two months since the MSCI Asia ex-Japan index last fell three days in a row.

Geopolitics may also be weighing on stocks and supporting bonds. President Joe Biden on Thursday threatened to change Washington’s policy towards Israel if it fails to protect aid workers and civilians in Gaza.

There are several potentially market-moving events in Friday’s regional calendar, including inflation data from the Philippines and Thailand, Australian trade, Japanese household consumption, and the Reserve Bank of India’s policy meeting.

US Treasury Secretary Janet Yellen is also in China for a series of meetings with top Chinese economic officials over the coming days, with trade tensions at the heart of them.

Yellen is expected to say that the flood of Chinese goods onto global markets is too much for the world to absorb, and stress that this is unhealthy for China too. It remains to be seen how receptive Beijing is to her concerns.

China’s exchange rate continues to attract attention. The offshore dollar/yuan has traded above the upper limit of the central bank’s daily band for 10 days, while the onshore dollar/yuan is creeping up towards it.

The gap that widened sharply 10 days ago is narrowing, but is still noticeable.

An eerie calm has descended on the yen, with traders still on Japanese intervention alert.

Bank of Japan Governor Kazuo Ueda signaled that the central bank could raise rates again if exchange-rate moves push up inflation, the Asahi newspaper reported.

The main calendar event in Asia on Friday is the Reserve Bank of India’s policy decision. All 56 economists in a Reuters poll expect the repo rate to be kept unchanged at 6.50%.

There is less consensus on when the first cut will come, with nine of 52 saying next quarter, 24 picking the third quarter, 17 saying the fourth quarter, and the rest expecting it at a later time. .

Meanwhile, Indian Prime Minister Narendra Modi, confident of winning a national election starting this month, has set an ambitious target of roughly doubling the economy and exports this decade, according to a government document seen by Reuters.

Here are key developments that could provide more direction to markets on Friday:

– India central bank policy meeting

– Thailand inflation (March)

– The Philippines inflation (March)

(By Jamie McGeever)

 

April 4 – Gold prices took a breather on Thursday after hitting an all-time high earlier in the session on expectations for lower US interest rates this year, as investors await more clarity on the timing of the cuts.

Spot gold was steady at USD 2,300.49 per ounce as of 2:50 p.m. EDT (1850 GMT) after hitting a record high of USD 2,304.09 earlier in the day.

US gold futures settled 0.2% lower at USD 2,308.5.

“It’s a continuation of the idea… propagated by the Powell speech the other day that the Federal Reserve is getting set to cut rates,” said Bart Melek, head of commodity strategies at TD Securities.

“That typically is a very accretive thing for gold, particularly since it looks like they (the Fed) are quite prepared to reduce interest rates at a time where inflation is going to be significantly above their 2% target.”

Fed officials including US central bank chief Jerome Powell on Wednesday continued focusing on the need for more debate and data before interest rates are cut, a move financial markets expect to occur in June.

Data showed the number of Americans filing new claims for unemployment benefits increased more than expected last week as labor market conditions gradually eased.

Focus now shifts to US March non-farm payrolls due on Friday which could shed more light on the timing of the Fed’s first rate cut.

Strong central bank buying and safe-haven inflows amid growing geopolitical tensions have boosted demand for gold, helping to drive the price up more than 25% since October.

“It’s heavily overbought and needs to correct to blow some of the froth. Fed cuts are priced in, in my view,” said StoneX analyst Rhona O’Connell.

Elsewhere, spot silver was flat at USD 27.22 per ounce after hitting its highest since June 2021. Platinum rose 0.3% to USD 939.65, and palladium gained 1.6% to USD 1,029.91.

(Reporting by Brijesh Patel in Bengaluru; Editing by Jan Harvey, Ravi Prakash Kumar, and Vijay Kishore)