Turkish President Tayyip Erdogan’s threat to cut crude flows from Iraq’s Kurdistan region sent oil prices higher on Thursday morning, extending the commodity’s gains for the fifth straight day. The commodity had finally broken over $55 per barrel last week after OPEC and its allies confirmed that market was successfully on its way to rebalancing, and the price continued to jump higher. As of 12:44 p.m. HK/SIN, Brent futures were trading up 0.63 percent to $59.39 per barrel. U.S. WTI futures were up 0.13 percent to $52.29 per barrel.
The price differential between WTI and Brent futures has been widening lately as U.S. crude has been struggling with oversupply and the closing of refineries in the wake of Hurricane Harvey. Hurricane Maria which is now traveling up the Atlantic Coast, has also caused refineries in Philadelphia to cut rates and slow deliveries. The spread tween Brent and WTI futures hit $7.17, the widest gap since August 2015. The American Petroleum Institute (API) will be releasing data on later today which is expected to show that U.S. crude inventories rose by 2.3 million barrels.
The pound hit a 10-day low on Monday, a widespread response to Prime Minister Theresa May’s comments on Friday that failed to provide concrete details about her Brexit plan. On Friday, the pound ended the weak with the weakest performance in seven weeks, and this loss was extended into Monday’s trading. The Sterling reversed slightly on Tuesday morning, gaining 0.13 percent against the dollar to trade at $1.3481.
The New Zealand dollar continued its down trend on Tuesday after falling over 1 percent on Monday due to mixed election results which left Prime Minister Bill English’s National Party with the largest number of votes but not enough parliamentary seats to rule outright. The kiwi was last trading at $0.7248, down 0.19 percent.
Traders are now eyeing Fed Chair Janet Yellen who will be speaking later today in Cleveland about “inflation, uncertainty, and monetary policy.”