A large decline in crude inventories supports oil prices

Thursday, July 17, 2014

US equity markets posted fresh gains yesterday with the Dow Jones hitting a new record high at 17,139 to close the trading session at 17138.20 (+0.45%). The S&P 500 index also rallied towards 2,000, gaining more than 0.4% on the day, while the USD index consolidated around 80.5. Federal Reserve Chair Janet Yellen defended the central bank's independence yesterday at the Congress. Yellen's comments on the US economy as well as Fed policy were fairly identical to those on Tuesday before the Senate Banking Committee. Fed’s Chair Yellen remained resilient at her view that an accommodative monetary policy is still needed even though the economy is recovering.

Dow Jones Index hit new record high

INDU Index (Dow Jones Industrial 2014-07-17 08-56-17

S&P 500 Index

SPX Index (S&P 500 Index )  2014-07-17 08-57-06

Asian equity markets traded sideways on Thursday. The Hang Seng index reversed from recent gains and slid slightly lower towards 23,480 (-0.2%), while the Nikkei index consolidated around 15,370.

Energy: The weekly DOE oil inventories report showed a large unexpected decline of 7.53 million barrels in the US crude oil inventories for the week ending 11th July versus expectations of a modest 2.1 million barrels decline. However, gasoline inventories continue to build up rising by 171,000 barrels last week despite that the US driving season has officially started. Brent front month futures climbed more than $1 per barrel yesterday, rebounding from recent steep declines supported by the solid DOE crude inventories figures.  

Brent Front Month Futures

CO1 Comdty (Generic 1st 'CO' Fut 2014-07-17 08-56-39

Today, the main focus will turn to the release of the Eurozone’s inflation data as well as US housing starts and building permits figures for June. Investors will be keeping an eye on the weekly US jobless claims and the Philly Fed business index release for July.

  

Events for today:

 

1000

EZ

Jun

Inflation Final

1330

US

Jun

Housing starts

1330

US

Jun

Building Permits

1330

US

w/e

Jobless Claims

1500

US

Jul

Philly Fed Business Index

1530

US

w/e

EIA Nat Gas

 

 

All times UK Local Time

 

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