Oil Markets Next Victim in Volatile Market
Oil futures headed significantly higher on Thursday morning in Asia after both Brent crude and U.S. WTI futures plummeted more than 4 percent on Wednesday, spurned by continued concerns over the global economic slowdown. On Wednesday both Brent and U.S. WTI hit their lowest levels since the start of 2019 after a data release showed that U.S. crude inventories increased more than expected.
According to reports by Bloomberg, OPEC is in the process of discussing the possibility of taking new measures to support oil prices. According to the report, a Saudi official said that his country is in talks with other producers about how to act in a way that will prevent prices from falling further.
U.S. WTI futures were up 3.11 percent as of 10:19 a.m. HK/SIN, trading at $52.68 per barrel, while Brent crude futures gained 2.38 percent to trade at $57.82 per barrel.
In addition to the recent volatility in the oil markets, analysts are bemoaning the volatility in the currency markets, claiming that the U.S.-Sino trade war is morphing into a currency war, especially as recent fluctuations in the Chinese yuan have pressured the U.S. dollar. In turn, the weakening dollar has been credited by some analysts for easing some of the pressure on oil prices.
Precious Metals Hit Record Highs
Gold and Silver have continued their recent strong run. Yesterday saw Silver rise by approximately 4% against the U.S. Dollar to prices above $17 per ounce, which have not been seen for a year. Gold, meanwhile, made a new 6-year high above the psychologically significant $1500 level.
The dollar index was unchanged early Thursday morning, sitting at 97.55 .DXY, though the dollar continued to struggle against the safe-haven yen, trading down 0.05 percent to 106.21. The greenback also dipped against the British pound and the euro. The pound gained 0.17 percent against the dollar to trade at $1.2161, while the euro was up 0.11 percent to $1.1208. According to a recent poll by Reuters, the majority of analysts believe that if the Federal Reserve gives in to President Trump’s demands for rate cuts up to 50 percentage points, the dollar’s dominance in the currency markets will effectively end.