Oil Futures Rise on U.S. Crude Inventory Drop; Gold Steady Amid Dollar Gains and Mideast Tensions – APM Capital Market Report

Mark Pussard, Head of Risk, APM Capital

Commodities

Oil futures rose Wednesday, finding support as data showed a fall in U.S. crude inventories and as stock markets continued their recovery from a global rout that had served to pull down commodity prices.

West Texas Intermediate crude for September delivery finished with a gain of $2.03, or 2.8%, at $75.23 a barrel on the New York Mercantile Exchange.

October Brent crude, the global benchmark, rose $1.85, or 2.4%, to settle at $78.33 a barrel on ICE Futures Europe.

Back on Nymex, September gasoline rose 1.3% to close at $2.3573 a gallon, while September heating oil jumped 2.6% to $2.3556 a gallon.Natural gas for September delivery rose 5.1% to $2.112 per million British thermal units.

Gold prices pared gains on Wednesday as the U.S. dollar and Treasury yields edged higher, although mounting bets of U.S. interest rate cuts in September and rising geopolitical tensions in the Middle East underpinned bullion.

Spot gold was flat at $2,388.16 per ounce at the London close, after rising as much as 0.7% earlier in the session.

US market

Wall Street equity indices closed lower on Wednesday (August 7) after a volatile session, following a rally in European and Asian markets that ultimately lost momentum amid persistent unease from recent market turbulence.

The benchmark S&P 500, which opened higher, started losing ground in the late morning and declined further after a US 10-year Treasuries auction. The S&P 500 ended the day down 40.53 points, or 0.77%, at 5,199.50.

The Dow Jones Industrial Average fell 234.21 points, or 0.60%, to 38,763.45. Meanwhile, the tech-heavy Nasdaq Composite lost 171.05 points, or 1.05%, to 16,195.81.

The yield on benchmark U.S. 10-year notes increased by 7 basis points to 3.958%, up from 3.888% late on Tuesday. 

European market

In Europe, stocks rebounded after hitting a six-month low in the previous session, mirroring a recovery in Asian markets and receiving support from a series of corporate earnings reports. 

The pan-European STOXX 600 index increased by 0.29% during trading, following its sharpest three-day decline since June 2022. Despite closing below the 500-point level for a second consecutive day, the index stabilized. 

Germany’s DAX index rose by 0.22%, and the UK’s FTSE 100 added 0.24%, while France’s CAC 40 index slightly fell by 0.23%. 

Asian market

Asian share markets extended their rally on Wednesday, led by another bounce in the Nikkei, as the Bank of Japan unexpectedly turned cautious on rate hikes amidst market volatility, which led to a sharp fall in the yen.

The Nikkei’s 1.2% rise followed Tuesday’s 10% rally, suggesting investors were finding their footing after the recent market rout. The index had slumped 13% on Monday.

MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1.7%. South Korean stocks added 1.7% while Taiwan surged 3.8%.

China’s blue-chip index rose 0.1% while Hong Kong’s Hang Seng index gained 1.3% after data showed that Chinese imports in July rose 7.2% from a year earlier, beating forecasts, in a positive sign for domestic demand, although growth in exports slowed.

Forex

The U.S. dollar edged higher Wednesday, while the Japanese yen slumped after the Bank of Japan attempted to calm troubled waters by signaling no more rate hikes while markets remain volatile.  

The Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.3% higher to 103.037, inching further away from Monday’s seven-month low. 

EUR/USD fell 0.1% to 1.0918, retreating further from Monday’s seven-month high of 1.1009 as the dollar rose.

GBP/USD rose 0.2% to 1.2708, still not far from the five-week low it hit in the previous session

USD/JPY rose 2.2% to 147.47, with the yen falling sharply after Bank of Japan officials downplayed expectations of interest rate hikes.

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Last Updated on 5 months by News Desk 1