North Sea Outage Boosts Oil Prices
Oil prices were up just over 1 percent during Wednesday’s Asian trading session after the shutdown of the Buzzard, Britain’s largest North Sea oilfield for repairs. The oilfield pumps approximately 150,000 barrels per day but was temporarily closed on Wednesday after a corroded pipe was found.
U.S. WTI futures were up 1.42 percent as of 2:102 p.m. HK/SIN, to $52.29 per barrel. Brentcrude futures were up 1.38 percent to $61.02 per barrel. Despite the closure of this oilfield, oil prices remain at yearly lows, and OPEC is weighing its next move, which will be announced at its meeting next week. U.S. President Donald Trump has praised the low oil prices, expressing his desire for oil to fall to $50 per barrel. Nevertheless, analysis (and many OPEC leaders) don’t share Trump’s sentiment and are concerned that low oil prices will harm American drillers and create global credit problems.
OPEC producers had increased output in June after Trump announced sanctions on Iran to begin in November. The sanctions, however, weren’t imposed as strictly as they were expected, with many countries receiving exemptions from the sanctions. The price of oil, therefore, did not has not risen as OPEC would have hoped.
Stock Market Movements
Asian markets were broadly higher on Wednesday, with the Nikkei 225 surging 1.02perent and the Hang Seng Index climbing 1.09 percent. The Shenzhen composite was up 1.30 percent. All major Asian indexes were in the green, though Australia’s ASX 200 was down a modest 0.06 percent. Traders are eagerly anticipating the meeting between President Trump and Chinese President Xi Jinping on Saturday, where they are optimistic that a trade deal could be reached, even though skeptics are concerned that Trump’s expectations remain unachievable, and that failure to come to an agreement will serve only to aggravate matters further.