Oil prices were higher on Wednesday, extending Tuesday’s 2 percent gains on expectations that markets are finally tightening after struggling with oversupply for the past few years. Data expected out later on Wednesday and on Thursday is expected to support the upwards price direction at least for the short-term, though analysts still question whether this trend will continue into 2018.
U.S. WTI futures were up 0.27 percent as of 12:47 p.m. HK/SIN, to $51.06 per barrel. Brent crude futures, the international benchmark for oil prices, gained 0.14 percent to trade at $56.69. Barclays bank raised its price forecast for Q1 2018 for Brent by $5 per barrel to $56 citing inventory draws that will allow the market to refocus on geopolitical risks.
Despite OPEC’s commitment to production cuts in 2017, increased production from non-OPEC countries, specifically the United States, has kept global supply higher than OPEC leaders hoped, which may impact prices into the next calendar year.
Stock Markets Head Higher
Global stock markets were also buoyed on Wednesday morning, with Asian markets hitting 10-year highs after Wall Street flirted with record highs. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.5 percent to 546.38, a level not seen since December 2007. Australia’s ASX 200 was up 0.59 percent and South Korea’s Kospi was up 0/79 percent just after midday. The Shanghai Composite was up 0.33 percent.
The Dow Jones Industrial Average closed at record highs on Tuesday after Wal-Mart shares jumped nearly 5 percent to two-year highs on forecasts that U.S. online sales would increase by 40 percent in the next fiscal year. The company also announced a $20 billion share buyback. The S&P 500 closed up 0.23 percent on Tuesday and the Nasdaq Composite added 0.11 percent.