Oil prices continue to remain high, bolstered by OPEC’s production cuts and a decrease in global inventories. Brent crude futures were trading at $69.16 per barrel, up 0.49 percent, and U.S. WTI futures were up 0.78 percent to $63.45 per barrel at 2:03 p.m. HK/SIN on Wednesday. On Tuesday the American Petroleum Institute divulged that crude inventories dropped by 11.2 million barrels last week, and official U.S. Energy Information Administration data is expected to confirm these numbers later on Wednesday. Crude oil prices have risen nearly 13 percent since last month, though analysts are beginning to wonder when the inevitable pullback will begin.
Among the factors that may push towards a pullback are increased U.S. production (which is expected to surpass 10 million barrels per day by the end of January) and angst in Asia surrounding the low profit margin of refiners which may reduce demand for crude oil. Asian crude oil priced are markedly higher than prices elsewhere, having already broken past $70 per barrel in Asia while prices remain under that marker in the rest of the world.
Currency Movements
The dollar continued its slide on Wednesday as the yen strengthened further in response to the Bank of Japan’s announcement that it will cut back its Japanese government bond purchases, a hint that the country’s easy money policy may be nearing its end. The dollar was trading at 112.30 yen, down 0.30 percent after hitting a low of 112.17 earlier in the session. The greenback did hold its own against most of its other primary trading partners, gaining slightly against the euro to trade at $1.1933, and posting modest gains against the British pound and the Swiss franc as well. The dollar index was up 0.01 percent to 92.53 .DXY.