Oil prices were fairly stable on Tuesday despite predictions that U.S. output would climb more quickly than expected, causing perhaps as much as an 18 percent increase in active rigs in 2018. Energy consultancy FGE said on Tuesday morning that the production cuts by OPEC and its non-member partners could reduce the stocks surplice to approximately 50 million barrels above the 5-year average by Q3 2018, sending prices as high as $70 per barrel. The current stocks surplus is 140 million barrels above the 5-year average. OPEC’s next meeting is at the end of this month, where the participants will focus on the outlook for the production cut policy and determine whether to extend the cuts beyond the initial deadline.
U.S. WTI crude futures were 0.05 percent higher at 1:55 p.m. HK/SIN, trading at $56.44 per barrel. Brent crude futures were marginally higher with a 0.11 percent price increase, to $62.29 per barrel.
Currency Markets Remain Stable
Currency markets saw little movement on Tuesday morning, with the dollar down against the euro to trade at $1.1738. The dollar was also down 0.06 percent against the yen, to trade at 112.56, remaining just above its overnight low of 111.89 yen. On Monday Federal Reserve Chair Janet Yellen announced that she would step down from the Fed board once her successor, Jerome Powell, was confirmed and sworn in. Though board terms usually last for 14 years it is typical for retired chairs to leave the board as a courtesy to their successor.
Currency movements are expected to be thin for the rest of the week as investors prepare for Thursday’s Thanksgiving holiday in the United States.