Crude prices recover as euphoria from Iranian deal subsides

Tuesday, November 26, 2013

Crude oil markets have stabilised after opening sharply lower on Monday with Brent prices recovering to the levels seen during the previous week as the euphoria surrounding the Iranian nuclear deal diminishes. Many market participants had expected the deal would prompt a surge in crude supplies and although negotiations outlined the potential for significant progress in the coming year, immediate material increases in oil supply will not be possible under the current deal.  

US equity markets have managed to hold firm near record levels after housing data comes in lower than expected. Despite reaching an intraday record high at 1808.10 and spending the majority of the session in positive territory, the S&P 500 staged a late retreat and closed marginally lower. The decline was prompted by weaker than expected pending home sales, which declined 2.2% y/y in October against a 1% decline expected by analysts in a Bloomberg survey. The DJIA closed largely unchanged at 16,072 despite pushing above 16,100 as a weaker dollar index supported markets around current levels.

Asian equity indices struggled to build on the previous session’s gains, taking the lead from the US session and drifting lower as markets settled after the buzz surrounding the Iranian nuclear deal subsided. Both the Nikkei and TOPIX indices closed 0.67% and 0.52% lower respectively with exporters struggling to gain support from a weaker yen which slid to a six month low, closing at 101.67 yesterday.

Gold prices rallied above $1,250 from a four month low yesterday as the combination of a weaker dollar and multi-month lows spurred demand from Asian buyers, partly offsetting the outflows in ETF’s. Despite a weaker dollar supporting physical buying, investors remain cautious to any changes in US monetary policy which continues to weigh heavy on the market.

 Events for today: Tuesday, 26 November 2013

1330

US

Oct

Housing starts

1500

US

Nov

Rich Fed

1500

US

Nov

Consumer Confidence

 

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