Oil prices remained near eight-week highs on Wednesday morning after data released on Tuesday by the American Petroleum Institute showed that U.S. crude stockpiles declined by 10.2 million barrels last week even as refineries increased output. This sharp decline in stockpiles far surpassed analyst expectations of a 2.6 million barrel decline. Oil prices were buoyed earlier this week after Nigeria agreed to cap its production at 1.8 million barrels per day. On Tuesday Indonesia’s energy minister also announced an interest in rejoining OPEC, provided that the country would not be required to participate in the group’s current production cuts which will be in force until March 2018 at the earliest.
Brent crude futures were up .86 percent as of 11:04 a.m. HK/SIN, to $50.63 per barrel. U.S. WTI futures were up 1 percent to $48.37 per barrel.
Currency Fluctuations?
The dollar traded mostly flat during Wednesday’s Asian session. The euro was steady against the greenback, trading at $1.1649. The dollar gained 0.03 percent against the yen, to 111.91, still down significantly from the 114 levels hit earlier this month. Wall Street hit record highs on Tuesday, boosting confidence in the greenback, and the Federal Reserve will conclude its two-day policy meeting on Wednesday, giving traders something to look forward to, even though the Fed is expected to keep interest rates unchanged.
Nevertheless, the continued political turmoil in the United States is expected to keep pressure on the dollar despite positive economic signals and a strong earnings season. On Tuesday President Trump cast doubts on the future of Jeff Sessions as the U.S. Attorney General after he expressed disappointment with the way Sessions is handling the investigations into Hillary Clinton and the scandal surrounding Russia. The loss of Sessions as Attorney General would leave the Trump team with one more placement to fill and would likely reduce Trump’s approval rating further which could have further negative effects on the dollar.