Yesterday the oil markets posted important gains, in light of the approval of the European Union stimulus plan and due to the rising hopes for the discovery of a Covid-19 vaccine. Nevertheless, the rally was halted after the markets learned that the crude oil inventories went up against the analysts' expectations.
The West Texas Intermediate crude oil futures gained 2.82 percent, closing the session at the 41.96 level. Conversely, the Brent oil futures went down by 2.40 percent, closing at the 44.32 level.
The American Petroleum Institute published on Tuesday that crude oil inventories increased by 7.544 million barrels for the week ending July 17. The analysts expected a fall in the inventories by 1.950 million barrels. This put negative pressure on the markets, in light of possible demand problems.
The US stock markets also gained during the session. The Dow Jones Industrial Average advanced 0.60 percent, hitting the 26,840.40 level, while the S&P 500 closed in the positive territory at the 3,257.30 level, gaining 0.17 percent during the session. On the other hand, the Nasdaq 100 went down by 1.09 percent, closing the session at the 10,833.07 level.
In the United States, the $600 per week Federal unemployment insurance benefit is expected to expire soon, so the US lawmakers are under pressure to pass legislation before the last day of the current session which would allow the US government to provide additional economic stimulus. Many expect that both parties will agree on delivering another stimulus check and that would provide funds directly to individuals and families.
At the moment there are around 15,101,115 confirmed coronavirus cases around the world, as well as a death toll of 619,647. The United States leads in the number of infections, with 4,028,733 confirmed cases, and a death toll of 144,958, followed by Brazil, India, and Russia.
The markets learned that a Chinese-made vaccine against the virus entered the final stage of testing. This means that if approved, the vaccine, which was developed by Sinovac Biotech, would obtain regulatory approval and its production could begin soon. The Russian First Deputy Defense Minister, Ruslan Tsalikov announced that a vaccine is ready, while another official commented that the mass-production of the vaccine could begin next month.
The European stock indices also closed in the positive territory. The DAX advanced 0.96 percent during the session, closing at the 13,171.83 level. Conversely, the CAC 40 gained 0.22 percent, closing the session at the 5,104.28 level, while the IBEX 35 advanced 0.22 percent during the session, closing at the 7,494.50 level. The Euro Stoxx 50 gained 0.50 percent, closing the session at the 3,405.35 level.
The European Union members recently agreed on a joint stimulus package that would give the Union members access to 390 billion Euros in grants and to 360 billion in repayable loans. Originally, the idea was providing 500 billion in grants but the northern European countries opposed this alternative.