Oil Prices Slip on High U.S. Inventories

Oil prices were lower on Thursday, pressured by record-high production in the U.S., where inventories rose by 1.3 million barrels last week, the Energy Information Administration announced yesterday. As of 3:03 p.m. HK/SIN, U.S. WTI futures were down 0.48 percent to $53.75 per barrel, and Brent crude futures were down 0.51 percent per barrel to $62.37 per barrel. Analysts believe that prices may have fallen further but were tempered by U.S. President Donald Trump’s recent sanctions against Venezuela which limited supply by roughly 500,000 barrels per day of crude exports. OPEC has also been taking great efforts to restrict production and to support prices, since implementing fresh production cuts in early January 2019. Traders are also curious how the Sino-U.S. trade war will play out and whether potential tariffs will decrease demand in the coming months.

Stock Market Movements

On Wall Street on Wednesday, the S&P 500 broke its five-day winning streak, slipping on mixed earnings reports and a less-than-stellar response to President Trump’s State of the Union address on Tuesday night. The S&P 500 closed 0.22 percent lower, while the Nasdaq Composite ended 0.36 percent down, pressured by FAANG stocks which all weakened. In Asia, markets were mixed, with low volatility due to the closure of the Chinese markets for the Lunar New Year and no reports expected out today. South Korea’s Kospi was unchanged in the mid-afternoon, but Japan’s Nikkei 225 was down 0.59 percent. Australia’s ASX 200 was the biggest winner, climbing 1.10 percent, while Hong Kong’s Hang Seng Index gained 0.21 percent.

Sara Patterson has a Master’s Degree in political science and enjoys analyzing both current events and the international markets to get a fuller perspective of the currency market. Before turning to financial writing, she taught English writing skills to high-school age students. Sara’s work has been published on various financial and Forex blogs.