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NEW YORK, Nov 22 – Oil prices fell nearly 1% in a volatile session on Wednesday as OPEC+ producers unexpectedly delayed a meeting on production cuts, raising questions about global crude supplies.

Brent futures settled 49 cents lower to USD 81.96 a barrel, after falling more than 4% to a low of USD 78.41 earlier in the session. US West Texas Intermediate crude settled 67 cents lower at USD 77.10, after declining more than 5% to a session low of USD 73.79 earlier in the day.

OPEC+ postponed the meeting, originally scheduled for Nov. 26, to Nov.30, it said in a statement, a surprise development that drove prices sharply lower in early trading. The group was expected to discuss whether to expand oil output cuts.

Prices bounced back after news that the disagreement was related to African countries, which are among the smaller producers in the group, rather than the top oil exporters.

Some traders also pointed to low liquidity ahead of the US Thanksgiving holiday.

The OPEC+ meeting, which includes major producers Saudi Arabia, Russia and other allies and members of the Organization of the Petroleum Exporting Countries, had been expected to consider further changes to a deal that already limits supply into 2024, according to analysts and OPEC+ sources.

The delay stoked concerns that more production could come online from oil producers in the coming months, said Dennis Kissler, senior vice president of trading at BOK Financial.

A rise in inventories also pressured prices lower on Wednesday morning, he said.

US crude oil inventories rose by 8.7 million barrels last week on higher imports, the Energy Information Administration (EIA) said.

The US dollar bounced back from a 2-1/2-month low after economic data showed lower unemployment claims. A rise in the greenback makes dollar-denominated oil more expensive for buyers in other currencies.

Both crude benchmarks have fallen for four straight weeks.

To support prices, OPEC and its allies will need to not only extend, but increase cuts, said John Evans of oil broker PVM in a note.

Earlier this week, an OPEC technical panel invited a top financial market dealer to give a presentation, seen by Reuters, which painted a bearish outlook for the oil market.

Even if the OPEC+ nations extend their cuts into next year, the global oil market will see a slight supply surplus in 2024, the head of the International Energy Agency’s oil markets and industry division said on Tuesday.

(Reporting by Nicole Jao, Paul Carsten, Ahmad Ghaddar, Laura Sanicola, and Colleen Howe; editing by Jason Neely, Marguerita Choy, David Gregorio, and Deepa Babington)

 

NEW YORK, Nov 21 – The S&P 500 will end next year only about 3% higher than its current level, with a possible US economic slowdown or recession among the biggest risks for the market in 2024, according to strategists in a Reuters poll released Tuesday.

The benchmark index will finish next year at 4,700, according to the median forecast of 33 strategists polled by Reuters during the last week and a half. That is 3.4% higher than Monday’s close of 4,547.38.

Nine of 13 strategists who also answered a question on whether US stocks will hit a record high in the coming six months said yes, and most of them said they expect it to happen in the early part of 2024.

Wall Street stocks have rallied strongly in recent weeks, boosted by the view the Federal Reserve is done hiking interest rates and may begin to cut them at some point next year.

Investors cheered benign October inflation data last week as Americans paid less for gasoline. The S&P 500 is up about 18% for 2023 to date.

The Fed earlier in November held rates steady, but, since 2022, the US central bank has hiked its policy rate 525 basis points in an effort to curb inflation.

Worries persist the economy could fall into a recession next year or at least slow.

“We see the economy weakening further into 2024, and, at some point the consumer will break,” said Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute.

But he said the firm thinks the US economy could quickly switch to recovery mode in the second half of the year. WFII sees the S&P 500 ending next year between 4,600 and 4,800.

Markets are anticipating inflation will decelerate and are currently pricing in a greater than 50% chance of a rate cut of at least 25 basis points by May, according to CME’s FedWatch Tool on Monday.

Still, Goldman Sachs’s economic team wrote in a recent note the Fed will hold off cutting rates until the fourth quarter of next year, with stronger-than-expected economic growth helping to forestall a recession.

Geopolitical problems are among other risks to the market heading into 2024, strategists said, with investors closely watching the war between Israel and Hamas militants in Gaza.

Ten of the 13 strategists who responded to a question on the US corporate profit outlook said they expect earnings to grow in the next six months.

Overall S&P 500 earnings growth for 2023 is estimated at 2.3% after a weak first half of the year, according to LSEG data.

Analysts expect earnings to rise 11.2% in 2024 over the previous year.

But valuations have risen with recent market gains. The S&P 500 index’s forward 12-month price-to-earnings ratio is now at 19.1, up from 17 at the end of 2022 and its long-term average of about 16, based on LSEG data.

For some strategists, technology, which is up 52% for the year so far and S&P 500’s best-performing sector, is still a favorite going into 2024.

“The technology revolution continues,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

Based on the poll, the Dow Jones industrial average will finish next year at 38,000, up about 8% from Monday’s close. The Dow is up 6% so far in 2023.

(Reporting by Caroline Valetkevitch; additional reporting by Chuck Mikolajczak, Sinead Carew and Stephen Culp in New York; Additional polling by Pranoy Krishna, Rahul Trivedi, and Sarupya Ganguly in Bengaluru; Editing by Alexandra Hudson)

 

NEW YORK, Nov 21 – Oil prices ended near flat on Tuesday after rallying for two sessions, with investors cautious ahead of Sunday’s scheduled OPEC+ meeting, when the producer group may discuss deepening supply cuts due to slowing global economic growth.

Brent crude futures settled 13 cents higher at USD 82.45 a barrel. US West Texas Intermediate crude futures eased 6 cents lower at USD 77.77.

Prices pared losses late, with one more session before the US Thanksgiving holiday on Thursday, which typically yields lower trading volumes in oil.

“Going into the long weekend the market would rather be a little bit long than short,” said Andrew Lipow, president of Lipow Oil Associates.

On Monday, both contracts climbed about 2% after three OPEC+ sources told Reuters the group, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, was set to consider additional oil supply cuts when it meets on Nov. 26.

OPEC+ is likely to extend or even deepen oil supply cuts into next year, eight analysts have predicted.

“We see some scope for the group to do a deeper reduction, but we would anticipate that Saudi Arabia would seek additional barrels from other members to share the burden of the adjustment,” said RBC Capital analyst Helima Croft.

Even if the OPEC+ nations extend their cuts into next year, the global oil market will see a slight supply surplus in 2024, the head of the International Energy Agency’s (IEA) oil markets and industry division said on Tuesday.

Currently though, the oil market is in a deficit with stocks declining “at a fast rate”, Toril Bosoni said on the sidelines of a conference in Oslo.

US crude stocks rose by nearly 9.1 million barrels in the week ended Nov. 17, according to market sources citing American Petroleum Institute figures on Tuesday.

Gasoline inventories dropped by about 1.79 million barrels, while distillate inventories fell by about 3.5 million barrels.

US government data on stockpiles was due on Wednesday.

Oil has fallen about 16% since late September as crude output in the US, the world’s top producer, held at record highs, while the market was concerned about demand growth and a potential economic slowdown.

Market participants kept an eye on a development in the Gulf of Mexico, as US officials said seven energy companies have been impacted by an oil discharge near Main Pass Oil Gathering Co’s (MPOG) pipeline system that is estimated to have released more than a million gallons of crude oil.

(Reporting by Stephanie Kelly in New York; additional reporting by Alex Lawler in London, Florence Tan in Singapore, and Yuka Obayashi in Tokyo; editing by Jason Neely, David Gregorio, and Bill Berkrot)

 

TOKYO, Nov 21 – Japan’s Nikkei 225 share average will continue its more-than-28% rally this year into 2024 to reach a three-decade high of 35,000 by the end of June, according to analyst estimates in a Reuters poll.

All respondents forecast continued earnings growth, despite many also expecting the tailwinds from a weaker yen starting to dissipate with the Bank of Japan approaching the end of super-accommodative stimulus and the Federal Reserve tightening cycle peaking out.

The median forecast for the Nikkei’s level in mid-2024 was 35,000, with responses ranging from 31,143 to 39,500, the Reuters poll of 10 stocks strategists taken Nov. 10-20 showed.

Japan’s equity benchmark started this week by pushing to its highest level since March 1990 at 33,853.46 following a three-week winning streak.

The rally was partly driven by a robust earnings season, as the yen’s drop to a one-year low beyond 150 per dollar during the period boosted exporters’ profit outlooks and as companies passed on higher costs to consumers – something that would have been almost unthinkable pre-pandemic.

Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui DS Asset Management in Tokyo, pointed to pent-up demand in both business investment and consumer demand, particularly for services, in forecasting the Nikkei to reach 39,500 in June and 40,900 by end-2024 – the most bullish forecasts in the survey.

“We are constructive mainly because we are optimistic about nominal GDP growth,” he said. “There is still room for equity prices to reflect the better picture in EPS growth.”

At the same time, Kichikawa and other respondents say the yen may have bottomed after pushing to the cusp of 152 per dollar earlier this month, amid expectations the Fed could begin cutting rates around May, while the BOJ may exit negative interest rate policy early next year.

That would mean some stagnation for equities in the latter half of next year, with the Nikkei still stuck at 35,000 at year-end, according to the median poll response.

IG’s Sydney-based analyst Tony Sycamore is among the most bearish – one of only two forecasters predicting a decline for the benchmark in the latter half of next year, from 35,000 to 33,000.

“35,000 looks to be about the level where Nikkei gains line up with the timing of the BOJ getting rid of negative interest rate policy,” Sycamore said.

“The Nikkei does still have the support of the BOJ being behind the curve,” he added. “But at some point early next year, they will need to do what needs to be done, and that will not be a great outcome for equities.”

(Reporting by Kevin Buckland; Additional reporting by Junko Fujita and Noriyuki Hirata; Additional polling by Rahul Trivedi and Pranoy Krishna; Editing by Alex Richardson)

Nov 20 – Gold prices edged lower on Monday, with a weaker dollar putting a floor under prices as investors awaited minutes of the Federal Reserve’s last meeting for cues on the central bank’s interest rate path.

Spot gold was down 0.1% at USD 1,977.49 per ounce by 3:33 p.m. ET (2033 GMT), after rising to as high as USD 1,993.29 on Friday. US gold futures settled 0.2% down at USD 1,980.30.

“Technically we’ve seen gold hit resistance and is back to range-bound trading with somewhat higher rates as a catalyst here,” said Bart Melek, head of commodity strategies at TD Securities.

The Fed was expected to maintain its narrative that monetary policy will depend on inflation and that it will keep rates elevated for as long as necessary, he added.

The minutes of the Fed meeting will be released on Tuesday.

Last week’s data reignited hopes that the Fed could begin easing monetary conditions sooner than expected after a slowing jobs market and a weaker-than-expected consumer inflation report.

Lower interest rates exert downward pressure on the dollar and bond yields, enhancing the appeal of non-yielding bullion.

Precious metals bulls have lost momentum and need fresh, fundamental impetus, analysts at Kitco Metals wrote in a note.

Rising US Treasury yields are trumping a lower US dollar and higher crude oil prices to keep gold and silver buyers skittish, Kitco said.

The dollar slipped 0.5% to a more than 2-1/2-month low against a basket of its rivals, limiting gold’s losses.

Holdings of SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, rose 1.5% on Friday.

Elsewhere, spot silver rose 1.3% to USD 23.43 per ounce. Platinum jumped 2.2% to USD 918.95 and palladium gained 2.4% to USD 1,077.83 per ounce, both touching their highest in about two weeks.

(Reporting by Anjana Anil in Bengaluru; Editing by Emelia Sithole-Matarise and Shilpi Majumdar)