U.S. crude prices plummeted over 4 percent on Wednesday afternoon, breaking an eight-day uptick, the longest oil rally in five years. In the early part of Thursday’s Asian session oil continued searching for direction, with U.S. WTI crude futures trading at $45.41 per barrel, up 0.62 percent at 9:40 a.m. HK/SIN. Brent futures were up 0.65 percent to $48.10 per barrel.
Wednesday’s fluctuation in oil pricing was caused in part by an increase in OPEC exports which increased for the second consecutive month in June. OPEC exported 25.92 million barrels per day in June, an increase of 450,000 barrels per day from May and 1.9 million more barrels per day than June of last year. Losses, steep as they were, were tempered by data out from the American Petroleum Institute which showed that U.S. crude inventories fell by 5.8 million barrels last week, surpassing expectations for a decrease of 2.3 million barrels. The strong dollar did little to help the situation. The dollar traded relatively flat on Thursday morning, hitting $1.1338 euro. The dollar also held steady against the yen trading at 113.10.
Asian Stocks Struggle
Asian stocks were off to a rough start on Thursday morning as traders reacted to the Federal Reserve Open Market Committee’s June meeting minutes which were released on Wednesday. The minutes express the Fed’s concern about how the interest rate hike would impact the markets. Fed officials were also mixed about when the Fed would begin to reduce its balance sheet.
Japan’s Nikkei 225 index was trading 0.27 percent lower in early trade while MSCI’s broadest index of shares outside Japan was flat, as was South Korea’s Kospi. Hong Kong’s Hang Seng Index was up 0.2 percent. The struggles in Asia came after the Nasdaq and the S&P 500 closed slightly higher on Wednesday, led by a recovery in the technology sector.