Oil prices set to slip over the week: pressure from rising U.S. output

Global Stock Markets

Oil prices were broadly steady on Thursday but still set to slip over the week for the second time in a row against a backdrop of rising U.S. crude production and an increase in inventories. 

Brent crude futures LCOc1 were down 3 cents at $64.31 per barrel by 1005 GMT. U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 3 cents at $61.18 a barrel.

Brent was on track for a drop of around 0.1 percent this week, after last week’s 4.4 percent slide.

A build in U.S. crude inventory reported the previous day was not as large as expected, given that stocks tend to rise towards the end of the winter as refineries conduct maintenance.

But with the threat of the United States sparking a trade war with some of its largest partners, financial markets were on edge. Prices of commodities stayed under pressure. 

China reported a steep monthly drop in crude imports in February, when the Lunar New Year holidays took place. Imports of crude dropped by more than 20 percent to a daily rate of 8.2 million barrels per day (bpd) from 9.4 million bpd in January.

Iimports in January and February combined gave a daily rate of about 9.02 million bpd, up 10.8 percent from the same period last year. [RUSSELL/]

Rising U.S. production, which reached 10.37 million bpd last week, remains a focus for investors.

U.S. output is expected to surge beyond 11 million bpd by late 2018, which would surpass the current No. 1 producer Russia.

This U.S. increase is putting pressure on the Organization of the Petroleum Exporting Countries, Russia and other nations which have been curbing output to prop up prices but risk losing market share.

Global stocks sag as key Trump adviser quits, stoking trade war fears

Global Stock Markets

Global stocks and the dollar fell on Wednesday after a strong advocate of free trade resigned from the White House, fanning fears that U.S. President Donald Trump will proceed with protectionist tariffs and risk a trade war. 

Economic adviser Gary Cohn, seen as a bulwark against protectionist forces within the Trump administration, said on Tuesday he was leaving, sparking a global sell-off across a number of major asset classes.

MSCI’s world equity index, which tracks shares in 47 countries, was down 0.2 percent, having seen some strength in Asian trading following news that South and North Korea would hold their first summit in more than a decade.

The pan-European Stoxx 600 was down 0.4 percent, with Germany’s DAX, home to many export-led companies, down 0.5 percent.

European car-makers, which face the risk of a hike in import tariffs to the United States, were among the worst performers, falling 1.1 percent. 

Equity futures pointed to the U.S. S&P 500 index opening 0.8 percent lower.  

Cohn’s departure rippled through foreign exchange markets, with the U.S. dollar falling 0.4 percent and 0.2 percent respectively against the Japanese yen and Swiss franc — both seen as safe-havens in times of uncertainty.

The dollar is just off a 14-month low against the yen hit on Friday.

The Canadian dollar and the Mexican peso both retreated by around 0.5 percent against the dollar as Cohn’s departure was seen as raising risks that Washington could walk away from NAFTA negotiations.

Other emerging market currencies that typically move in sympathy with the dollar were lower, with the South African rand and Russian rouble both down around 0.5 percent against the dollar.

Commodities fell on worries that trade friction could slow global growth, with Brent crude futures giving up the previous day’s gains to drop 1.2 percent.

Copper on the London Metal Exchange lost 0.9 percent, paring a 1.4 percent gain from the previous session.

European government bonds rallied, with yields across the euro zone falling by 1-3 basis points, following similar strengthening in U.S. Treasuries overnight.

US Judge Rules - Cryptos Are Commodities,

Global Stock Markets

A U.S. district judge has backed the U.S. Commodity Futures Trading Commission in defining cryptocurrencies as commodities.

According to a Memorandum & Order for a court case that the CFTC had brought against cryptocurrency business operator Patrick Kerry McDonnell, Judge Jack Weinstein from a district court in New York ruled that "virtual currencies can be regulated by CFTC as a commodity."

"Virtual currencies are 'goods' exchanged in a market for a uniform quality and value. ... They fall well within the common definition of 'commodity'," the judge wrote in the order on Tuesday.

At issue in the case was whether the CFTC had the authority to regulate cryptocurrency as a commodity in the absence of federal level rules, and whether the law permitted the CFTC to "exercise its jurisdiction over fraud that does not directly involve the sale of futures or derivative contracts," according to the document.

In both instances, Weinstein answered in the affirmative, meaning the case can be brought against the defendant.

The judge further granted a preliminary injunction barring the defendant from further engagement in cryptocurrency investment as the case continues.

As previously reported by CoinDesk, the CFTC defined cryptocurrencies as commodities as far back as 2015, a decision that has led the agency to recently target cryptocurrency businesses that it considers are hoaxing investors.

In one of several cases filed in January this year, the CFTC sued McDonnell and his company CabbageTech for allegedly absconding with customers' digital assets.

The agency said at the time that McDonnell branded himself as a cryptocurrency investment expert with trading advice that could result in highly attractive returns on investment.

Yet soon after customers sent in money and cryptocurrencies, the defendant allegedly misappropriated the funds, according to the case.

Bitcoin-Futures Regulator Clears Crypto Coins Trade

Global Stock Markets

The U.S.’s main commodities regulator recently told its employees that they are allowed to invest in cryptocurrencies, a determination that came weeks after the agency began overseeing Bitcoin futures.

Under the Commodity Futures Trading Commission’s ethics guidance, workers can trade digital tokens as long as they don’t buy them on margin or have inside information gleaned from their jobs. Investing in the Bitcoin futures that the CFTC polices, however, is barred.

While it’s not known how many people at the CFTC are actively trading the products, the agency’s general counsel, Daniel Davis, told employees in a Feb. 5 memo that the guidelines were being issued after the commission’s ethics office had received “numerous inquiries” about whether the investments were permissible.

The CFTC’s ruling comes at a time when federal agencies are debating whether and how to impose rules on the nascent products that have rapidly become a global investment craze. A number of officials have been wary of putting a government stamp of approval on cryptocurrencies, raising concerns about their wild price swings, their use in illicit transactions and the frequency with which they’ve been hacked and stolen.
Mind-boggling Decision

The CFTC has been ahead of the crypto frenzy, first declaring in 2014 that the digital currency was a commodity subject to the agency’s oversight. Still, that supervision has mostly consisted of enforcement actions to halt alleged frauds. Much of the trading for coins now takes place on lightly regulated exchanges or in foreign countries where the commission has little reach.
Oversight Forefront

That began to change late last year when Giancarlo allowed two major U.S. exchanges to offer Bitcoin futures -- a move that placed his agency at the forefront of crypto oversight. The decision concerned some other regulators who thought Giancarlo was moving too quickly, people familiar with the matter have said.

The guidance on trading digital currencies was based on the CFTC’s standard ethics rules, which allow investments in physical commodities. That’s because the agency doesn’t regulate markets where corn or oil, for example, are bought and sold. Instead, it regulates futures contracts derived from oil or corn prices.

The guidance does note that staff members shouldn’t invest if they have nonpublic information that could impact the trade. That could potentially arise if they are handling an enforcement case, conducting surveillance or working on a regulation involving digital tokens.

The Securities and Exchange Commission also allows its workers to invest in digital currencies, with some exceptions similar to the CFTC. However, the SEC has less responsibility for overseeing the crypto markets.

The SEC’s jurisdiction right now is largely limited to so-called initial coin offerings, where companies raise money by selling tokens. The agency’s employees cannot invest in those until seven days after the ICO, according to a memo its ethics counsel issued in January. The SEC also requires its staff to pre-clear all their digital currency trades -- a requirement that the CFTC doesn’t have.

Attorneys specializing in government ethics were split on whether CFTC employees should be allowed to trade the products.

There is no government-wide policy on the investments and each agency has to set its own rules. That task is made harder because digital currencies are relatively new and there isn’t broad agreement about how they should be classified.
Regulators Grappling

Regulators and government ethics lawyers are grappling with a number of tricky questions, including whether the coins are commodities, currencies or securities. Another potential issue is whether they are akin to an investment or more like a pile of cash in a drawer.

However, Richard Painter who specializes in securities law and was a White House ethics lawyer under President George W. Bush, said that cryptocurrencies seem to be more like futures than physical commodities.

While most CFTC employees aren’t likely to trade barrels of oil or bushels of wheat, partly because they could need a warehouse to store them, digital coins don’t present that problem.

Also, regulatory decisions can have an impact on the underlying markets. One major example: The price of Bitcoin jumped 13 percent on Dec. 1, the day of the CFTC’s announcement that it was allowing Bitcoin futures.

Trump tariffs on steel would hit China -- and the entire global trading system

Asian Stock Markets

If President Trump decides to impose steep tariffs on steel, it would be a direct shot at Beijing.

But the list of countries that would be affected doesn't end with China. Limiting or taxing steel imports could also hit Canada, Brazil, South Korea, and Russia — and the implications could ripple throughout the entire trading system. 

On Trump's desk are a broad range of trade options meant to bolster the domestic steel industry. The recommendations sent from the Commerce Department include across-the-board tariffs, targeting select nations with even higher tariffs and capping how much steel comes into the country. 

The president has until April to choose any one of these options, a combination of them or entirely different trade actions. He has a similar set of recommendations on aluminum

In the past, the president's rhetoric on steel has focused on China. Since starting his run for office, Trump has laid into China for sending excess cheap steel into the global market, which he says makes it impossible for American steel companies to compete. 

It's true that China, the world's top exporter of steel, is a major source of a global supply glut that has driven down prices. American and European steelmakers have made complaints echoing Trump's criticism for years.

However, China is not the top country from which the United States imports steel. In fact, it's not even in the top 10. 

Due to the trade penalties the United States has slapped on Chinese steel during past administrations, China sends much less steel to the U.S. than it used to. 

The United States imports most of its steel — 16% — from Canada. It imports 13% from Brazil, 10% from South Korea, 9% from Mexico and 9% from Russia, according to a Department of Commerce report from December 2017.

That means that a 24% tariff on steel imports from all countries — one of the proposals on the table — would also have a major impact across the globe.

Trade experts say that if Trump goes that route, even U.S. allies like Canada, South Korea, Mexico could be willing to retaliate, sticking tariffs of their own on U.S. exports like agricultural products, or picking non-U.S. goods — like Airbus planes over Boeing models. 

China would still feel the pain from protective U.S. measures. A lot of China's steel makes its way to the United States indirectly.

Even if Trump does not decide to enact an across-the-board tariff, the other options he's considering will also resonate globally.

That's because the Commerce Department is advising Trump to take action under a little known trade law from 1962.

If Trump invokes Section 232 of the Trade Expansion Act, as is recommended, that means he believes steel imports are hurting national security.

Experts say that rationale is flimsy, and isn't likely to hold under the rules established by the World Trade Organization.

In fact, it could be deemed such a flagrant violation of the rules that it could open the door for tit-for-tat responses from other countries, according to Matt Gold, an international trade law expert at Fordham University. 

Trump weighs tariffs, quotas on U.S. steel, aluminium imports

Global Stock Markets

U.S. President Donald Trump said on Tuesday he was considering a range of options to address steel and aluminium imports that he said were unfairly hurting U.S. producers, including tariffs and quotas.  

Trump’s comments - his strongest signal in months that he will take at least some action to restrict imports of the two metals - came in a meeting with a bipartisan group of U.S. senators and representatives at the White House. Reporters were present for part of the meeting.

Some of the lawmakers urged him to act decisively to save steel and aluminium plants in their states, but others urged caution because higher prices would hurt downstream manufacturers that consume steel and aluminium.

Trump is weighing options presented last month by the U.S. Commerce Department in parallel “Section 232” investigations into whether import restrictions on steel and aluminium are needed to protect national security. The probes were authorized under a 1962 trade law that has not been invoked since 2001.

Trump said that the steel and aluminium industries were being “decimated by dumping” and talked about the empty steel mills he saw on the campaign trail in 2016.

U.S. steel stocks rose broadly after the comments, with the S&P 1500 steel index closing up 1.1 percent and outperforming the broader market. Alcoa Inc shares ended 1.4 percent higher, with Century Aluminum up 0.5 percent.

Trump now has until around April 11 to decide whether to impose steel import curbs and April 20 to decide on aluminium restrictions. The Commerce Department has not revealed its recommendations in the probes launched last spring.

But Commerce Secretary Wilbur Ross told the lawmakers that Section 232 powers “can be applied in a much more surgical way” that could lead to tariffs on imports from certain countries and quotas from other nations suspected of transhipping products.

Some lawmakers came away from the meeting with the impression that Trump would impose some restrictions but understood the need for a balanced approach. 

Several lawmakers cited the need to maintain U.S. energy independence and the electrical grid. They urged steps to protect U.S. producers of oil drilling and transport pipe and noted AK Steel is the last American producer of electrical steel for electric transformers.

Asked about Trump’s steel comments, Chinese Foreign Ministry spokesman Geng Shuang said the world economy was recovering and all parties should cherish the momentum and send signals of cooperation and mutual benefit.

Steel and aluminium users, meanwhile, have urged caution in any restrictions to avoid disruptions or price spikes in the raw materials used in everything from autos to appliances and aircraft and construction.

The Motor and Equipment Manufacturers Association, representing auto parts makers with 871,000 U.S. employees, urged Trump in a letter on Tuesday to exclude an extensive list of products from import restrictions, from tire cord steel to high-pressure aluminium die castings.

China will contest any 'unfair' U.S. trade measures on steel: think-tank

Asian Stock Markets

China will oppose any “unfair and unreasonable” trade measures by countries such as the United States against its steel companies, a Chinese government think-tank said on Tuesday, arguing protectionism will “poison” the industry. 

The Institute, which provides consultancy services to Chinese government policymakers and steel enterprises, was responding to recent efforts by U.S. steel firms urging President Donald Trump to curb surging imports they say are undermining the U.S. industry.

Trump will meet with a bipartisan group of lawmakers later on Tuesday to discuss trade matters. The meeting comes a month after the Commerce Department handed him the results of its investigation into steel and aluminum imports, giving him 90 days to respond.

The Commerce Department has offered no insight into its conclusions, although the probe could lead to broad tariffs or import quotas.

Trump is considering action on both steel and aluminum under the rarely used ‘Section 232’ of a 1962 U.S. trade law, which allows for restrictions to protect national security.

The Chinese think-tank said it its email that, “Trade protection will poison the healthy development of steel industry. Only open and cooperation can expand the common benefit.”

The United States is the world’s biggest steel importer, buying nearly 40 percent of shipments from Canada, Brazil and South Korea.

But China was not among the top 10 sources of U.S. steel imports in January-September 2017, based on U.S. Commerce Department data.

Exports from China, the world’s top steel producer, to the U.S. reached 1.18 million tonnes last year. 

That’s a fraction of the 800 million tonnes it makes each year, equal to about half of global output.

From a record high of 112.4 million tonnes in 2015, China’s total steel exports have fallen amid threats of a trade dispute and better demand at home. The exports dropped to 75.4 million tonnes last year.

Gold jumps to near 4-month high as dollar slips sharply

Global Stock Markets

Gold jumped to its highest in nearly four months on Wednesday as the dollar tumbled to a six-week low versus the Japanese yen and slid against the euro, lifting assets priced in the U.S. currency and offsetting a rise in global yields.

The dollar fell as much as 1.2 percent against the yen after the Bank of Japan’s move to trim its long-dated government bond purchases earlier this week, putting the U.S. currency on track for its biggest two-day drop in nearly eight months.

The BoJ move also lifted bond yields across the world, generally a negative factor for gold as it increases the opportunity cost of holding non-interest bearing bullion. However, the impact of the dollar’s fall outweighed that factor.

Spot gold was up 0.9 percent at $1,324.40 an ounce at 1107 GMT, having earlier touched its highest since Sept. 15 at $1,326.56. U.S. gold futures for February delivery were up $11.50 an ounce at $1,325.20.

The dollar’s slide against the yen also saw it move lower against the euro, with the single currency up 0.6 percent versus the U.S. unit.

Major government bond yields hit multi-month highs on Wednesday as investors reevaluated the likelihood of continued easy-money policies by the world’s major central banks following the BoJ move. The 10-year U.S. Treasury yield hit 2.57 percent for the first time since March.

Among other metals, palladium was down 0.1 percent at $1,098.50 an ounce, after hitting a record high on Tuesday at $1,111.40. Tightening emissions standards and a switch away from diesel cars to more palladium-heavy gasoline models has shored up demand expectations for the autocatalyst metal.

Silver was up 1.2 percent at $17.16 an ounce, while platinum was 0.1 percent higher at $965.90 an ounce.

Oil hits highest since May 2015 above $68 on tighter market

Oil Stock Markets

Oil rose further above $68 a barrel briefly on Tuesday, touching its highest since May 2015, supported by OPEC-led production cuts and expectations U.S. crude inventories fell for an eighth week. 

The Organization of the Petroleum Exporting Countries and allies including Russia are keeping supply limits in place in 2018, a second year of restraint, to reduce a price-denting glut of oil held in inventories.

Brent crude LCOc1, the international benchmark, was up 9 cents at $67.87 a barrel at 1111 GMT and earlier touched $68.29, its highest since May 2015. U.S. crude CLc1 rose 18 cents to $61.91 and also reached its highest since May 2015.

OPEC is cutting output by even more than it promised [OPEC/O] and the restraint is reducing oil stocks globally, a trend most visible in the United States, the world’s largest and most transparent oil market.

Supply reports this week from industry group American Petroleum Institute and the U.S. government’s Energy Information Administration are expected to show U.S. crude stocks fell by 4.1 million barrels, an eighth week of decline. [EIA/S]

The API releases its data at 2130 GMT on Tuesday and the government report is out on Wednesday.
Many producers, still suffering from a 2014 price collapse, are enjoying the rally, although they are wary it will spur rival supply sources. Iran said on Tuesday OPEC members were not keen on increased prices.

Unrest in Iran, OPEC’s third-largest producer, has lent support to prices this year although output and exports have not been affected. Economic collapse is leading to involuntary production cuts in Venezuela, another OPEC member.

There is no sign yet that OPEC is prepared to relax its supply restraint.

A senior OPEC source from a major Middle Eastern oil producer said on Monday OPEC would boost output only if there were significant and sustained production disruptions from Iran and Venezuela.
The rise in prices is expected to drive gains in U.S. production during 2018, offsetting curbs by others.

Still, the latest U.S. rig count, an early indicator of future output, showed a slight dip in the amount of rigs drilling for new oil, which lent support to prices.

Oil stable on lower U.S. rig count

Oil Stock Markets

Oil prices were stable on Monday, supported by a slight decline in the number of U.S. rigs drilling for new production, with crude holding just below near three-year highs reached last week.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $61.50 a barrel at 0800 GMT, 6 cents above their last settlement. Futures reached $62.21 last week, the most since May 2015.

Brent crude futures LCOc1 were at $67.66 a barrel, 4 cents above their last close. Brent hit $68.27 high last week, the highest since May 2015.

Traders said the gains were due to a slight decline in the number of U.S. rigs drilling for new production, which eased by five in the week to Jan. 5 to 742, according to data from oil services firm Baker Hughes.

Despite this, U.S. production C-OUT-T-EIA is expected to break through 10 million barrels per day (bpd) very soon, largely thanks to soaring output from shale drillers. Only top producers Russia and Saudi Arabia produce more.

Rising U.S. production is the main factor countering production cuts led by the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) and by Russia, which began in January last year and are set to last through 2018.

Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore, said “the OPEC vs shale debate will rage” this year, being a key price driving factor.

Perth Mint's Dec gold sales up 13 pct, silver surges 61 pct

Australian Stock Markets

The Perth Mint's sales of gold and silver products rose in December from a month ago, the mint said in a blog post on its website on Monday.

Sales of gold coins and minted bars rose 13 percent to 27,009 ounces in December from 23,901 ounces a month ago, the mint said.

Silver sales during December surged 61 percent to 874,437 ounces from 544,436 ounces in November.

The Perth Mint refines more than 90 percent of newly mined gold in Australia, the world's second-largest gold producer after China.

Spot gold prices XAU= rose 2.2 percent in December.

Period
2017-Dec
27,009
874,437
2017-Nov
23,901
544,436
2017-Oct
44,618

Bitcoin futures trading just got a lot bigger

European Stock Markets

The red hot digital currency hit new highs over the weekend -- and it's now got the weight of the world's biggest exchange operator behind it. 

Financial market giant CME Group (CME) launched bitcoin futures trading on Sunday evening in the U.S., a week after a similar move by its smaller rival Cboe Global Markets (CBOE). 

The involvement of top financial institutions in the bitcoin market underscores its growing mainstream acceptance even as government officials, business leaders and economists continue to warn people against investing in it.  

The CME launch "adds considerable legitimacy" to bitcoin trading, said Shane Chanel, an adviser at Australian investment services firm ASR Wealth Advisers.

Bitcoin's price (XBT) hit a record high earlier Sunday before the futures trading started on CME. It climbed to within a few hundred dollars of the $20,000 mark before slipping back. By early Monday, it was trading around $19,000.

Investors were betting it will go higher. The January futures price on CME was about $19,500 Monday morning, down from an earlier high of $20,650.

Futures are contracts that let investors buy or sell something at a specific price in the future. But unlike traditional commodities such as oil or agricultural products, bitcoins aren't physical assets.

And unlike traditional currencies, there isn't a central bank that backs bitcoin. The virtual coins are created on computers using complex algorithms and recorded in a digital ledger.


Bitcoin has had an incredible year. Its price has skyrocketed more than 1,700% since the start of January, partly on the expectation that more and more mainstream investors will begin trading it.

That's prompted some high-profile figures in finance and economics to sound the alarm, cautioning that the currency's boom is simply a huge, speculative bubble.
But their warnings contrast with moves like those of CME and and Cboe to start bitcoin futures trading.

CME is home to about three times as much trading per day than Cboe. With CME's futures contracts, investors have to trade bitcoin in blocks of five, versus just one at a time with Cboe.

The two also price their bitcoin contracts in different ways. Cboe bases its price on one exchange, Gemini, whereas CME takes an average from multiple exchanges.


ASR's Chanel said that the launch of futures on CME should eventually help iron out some of the wild gyrations in the price of bitcoin.


And more big names in finance are also planning to get involved.New York's Nasdaq is expected to launch its own bitcoin futures trading sometime next year.

Gold slips, heads for weekly decline, even as the dollar index droops

Global Stock Markets

Gold slipped Friday as investors pocketed some of the yellow metal’s strong pre-Thanksgiving gain.

 

The metal unhinged from its typically inverse relationship to the dollar, which remained lower in the wake of Federal Reserve signals for a cautious approach to interest-rate tightening into next year.

December gold GCZ7, -0.32% was down $4.90, or 0.4%, to $1,287.40 an ounce. After a see-saw week, the yellow metal was on track to log a roughly 0.4% weekly decline. The exchange-traded SPDR Gold Trust GLD, +0.92%  slipped 0.3% premarket.

The ICE U.S. Dollar Index DXY, -0.09%  was down less than 0.01% at 93.10. It’s down about 0.6% for this week and has shed nearly 9% so far this year. Gold and the dollar typically trade inversely as moves in the U.S. unit can influence the attractiveness of commodities to holders of other currencies.

Gold prices ended sharply higher Wednesday on the back of a weaker dollar, and moved up in electronic trading after minutes from the Federal Reserve’s November meeting hinted that the central bank may not be as aggressive in raising interest rates next year as expected. A December hike is largely priced in to financial markets.

The Fed in early November viewed a “near-term” increase in interest rates as likely, but policy makers also expressed more alarm about persistently low inflation. That raises the question of whether the Fed will stick to three planned rate increases in 2018.

Still, analysts believe the debate over the next chapter for interest rates is far from settled.

Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

December silver SIZ7, -0.54% fell 15 cents, or 0.9%, to $16.96 an ounce. The exchange-traded
 
iShares Silver Trust SLV, +1.00%  fell 0.4%. Silver headed for a 1.2% drop for the week, which would mark its first weekly drop in the last three.

Trading was mixed elsewhere as December copper HGZ7, +0.86%  firmed 0.8% to $3.165 a pound, while January platinum PLF8, -0.29%  fell 0.5% to $936 an ounce, on track for its first weekly decline in three, and December palladium PAZ7, +0.29%  rose 0.3% to $1,004.50 an ounce. Palladium has climbed roughly 1.7% this week.

Oil prices firm on expected OPEC cut extension, U.S. crude stock draw

Oil Stock Markets

Oil prices climbed on Wednesday after a reported fall in U.S. crude inventories and on expectations that an OPEC-led production cut aimed at tightening the market will be extended beyond next March. 

Brent crude futures, the international benchmark for oil prices, were at $63.07 per barrel at 0257 GMT, up 50 cents, or 0.8 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $57.74 a barrel, up 92 cents, or 1.6 percent.

Traders said markets have been supported by an effort led by the Organization of the Petroleum Exporting Countries (OPEC) to restrain output in a bid to end a global supply overhang.

The deal to curb production is due to expire in March, but OPEC will meet on Nov. 30 in Vienna to discuss the outlook for the policy.

J.P. Morgan said in its 2018 commodities outlook, released late on Tuesday, that oil markets in 2018 will be balanced on the back of extended  production cuts but added that without extended cuts, markets would be in surplus.

Brent to trade at the top of the $40 to $60 per barrel range, with Brent averaging $58 per barrel in 2018, according to U.S. bank and WTI is expected to average $54.6 per barrel.

Traders said there was also some price support from a weekly report on Tuesday by the American Petroleum Institute which said U.S. crude inventories fell by 6.4 million barrels in the week to Nov. 17.

Despite this, traders said crude markets were being weighed down by rising production in the United States, which has jumped by almost 15 percent since mid-2016 to 9.65 million barrels per day.

The latest official U.S. production and inventory data is due on Wednesday.

Australian shares tick up on materials, oil

Australian Stock Markets

Australian shares ticked up on Wednesday, with rising prices for oil and metals supporting the energy and materials indexes.

The S&P/ASX 200 index .AXJO climbed 0.5 percent or 27.98 points to 5,991.50 by 0153 GMT. The benchmark rose 0.3 percent on Tuesday.

Nine of the exchange's 10 sectors traded positively.

The Australian metals and mining index .AXMM rose 1.2 percent, with heavyweight BHP BHP.AX driving the gains on the benchmark, while its rival Rio Tinto (LON:RIO) RIO.AX rose 1.2 percent.

Oil edged up on Tuesday, supported by expectations that OPEC and other producing countries next week would extend output cuts. O/R

The energy sector .AXEJ was the best performer on the benchmark, with Origin Energy Ltd ORG.AX rising 2.1 percent and Woodside Petroleum WPL.AX gaining 0.8 percent.
Chinese rebar steel futures rose nearly 3 percent on Tuesday, registering a second straight day of gains on tighter supply. IRONORE/

Wall Street also provided a strong lead as U.S. stocks jumped on Tuesday, pushing all three major indexes to record closing highs. .N

Among other blue chips, blood products producer CSL Ltd CSL.AX rose 1.5 percent to a near two week high, on track for fourth consecutive session of gains.

But National Bank of Australia NAB.AX dipped 0.4 percent, while Westpac Banking Corp WBC.AX fell nearly half a percent.

There was "not a strong case" for a near-term interest rate rise as inflation was expected to undershoot its target for another two years, suggesting that a rate hike is not on the cards for some time. the Tasman Sea, New Zealand's benchmark S&P/NZX 50 index .NZ50 rose 0.1 percent or 9.07 points to 8,097.55.

A2 Milk Company Ltd ATM.NZ led the gains as it rose 5 percent to its highest in more than three weeks.

Medical device manufacturer Fisher & Paykel Healthcare Corporation Ltd FPH.NZ was the biggest drag on the index for a second straight day, slumping 4.2 percent.

Oil markets tepid ahead of November 30 OPEC meeting

Oil Stock Markets

Oil markets were tepid on Monday as traders were reluctant to take on big new positions ahead of an OPEC meeting at the end of the month, when the producer club is expected to decide whether to continue output cuts aimed at propping up prices.

Brent crude futures LCOc1, the international benchmark for oil prices, were at $62.56 per barrel at 0439 GMT, down 16 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $56.59 a barrel, up 4 cents, or 0.1 percent, from their last settlement.

Traders said they were avoiding taking on large new positions due to uncertainty in markets.

The Organization of the Petroleum Exporting Countries (OPEC), together with a group of non-OPEC producers led by Russia, has been restraining output since the start of this year in a bid to end a global supply overhang and prop up prices.

The deal to curb output is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss the outlook for the policy.

OPEC is expected to agree an extension of the cut as storage levels remain high despite recent drawdowns, although there are doubts about the willingness of some participants to continue to restrain output.

In the United States, the number of rigs drilling for new oil production remained unchanged in the week to Nov. 17, at 738, data from oil services firm Baker Hughes showed on Friday.

Oil stable as OPEC cuts counter rising U.S. supplies

Oil Stock Markets

Oil markets were stable on Thursday as rising U.S. crude production and inventories were countered by expectations that OPEC will extend an ongoing production cut during a meeting at the end of this month.

Brent crude futures LCOc1, the international benchmark for oil prices, were at $61.98 per barrel at 0438 GMT, 11 cents above their last close. 

U.S. West Texas Intermediate (WTI) crude futures were at $55.37 a barrel, 4 cents up from their last settlement.

Despite these slight gains, Brent and WTI have lost around 4 percent in value since hitting 2015 highs last week, pulled down in part by rising crude availability in the United States.

U.S. crude inventories C-STK-T-EIA rose for a second week in a row, building by 1.9 million barrels in the week to Nov. 10 to 459 million barrels, the government’s Energy Information Administration (EIA) said on Wednesday.

That compared to analyst expectations in a Reuters poll for a decrease of 2.2 million barrels.

U.S. crude oil production C-OUT-T-EIA hit a record of 9.65 million barrels per day (bpd), meaning output has risen by almost 15 percent since their most recent low in mid-2016.

Despite this, analysts said prices were relatively well supported due to efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to withhold oil production in order to tighten the market and prop up prices.

The deal is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss policy, and it is expected to agree an extension of the cuts.

Weaker commodities drag European shares to eight-week low; Airbus rallies

European Stock Markets

A fall in commodity stocks and continued profit taking sent European shares to an eight-week low on Wednesday, but Airbus rallied after winning its biggest order. 

Crude oil’s price slide on worries over the outlook for demand and weaker metal prices weighed on mining and energy stocks like Rio Tinto (RIO.L) and Royal Dutch Shell (RDSa.L).

Their falls helped send the pan-European STOXX 600 index down 0.6 percent to its lowest level since Sept. 20.

The index was on track or its seventh session of straight losses, its longest losing streak since October 2016 when markets fell in the run-up to the U.S. presidential elections.

The UK's top share index FTSE 100 .FTSE declined 0.4 percent and Germany's export oriented DAX .GDAXI index fell 0.6 percent, weighed down by a stronger euro

Banks .SX7P were also among the biggest losers, down 1 percent, but falls were spread across sectors as investors continued to take profits following this year’s rally.

The STOXX 600 is still up nearly 6 percent so far this year.

Deutsche Bank strategists led by Sebastian Raedler expect the STOXX 600 to end the year at 395 points, 3 percent above current levels, before falling back to 375 in the first months of 2018

On the earnings front, data from Thomson Reuters IBES data show that 48 percent of companies 

listed on the euro zone MSCI EMU index have beaten analyst expectations while 40 percent have missed them. Earning beats stand at 53 percent for the broader MSCI Europe index and at 72 percent for the U.S.’s S&P 500.

Germany’s Lanxess (LXSG.DE) was among the biggest fallers on the STOXX on Wednesday, down 3.2 percent, after its earnings update did not provide any positive surprise. 

On the positive side, Airbus (AIR.PA) rose 3.4 percent.

Airline pioneer Bill Franke placed a historic order for 430 A320neo-family jets in a deal worth $49.5 billion at list prices that marks a dramatic turnaround for Airbus, which had been lagging behind Boeing in the contest for orders.

The deal is one of the industry’s biggest deals by volume and the most planes sold by Airbus in one batch.

BP, Shell lead plan for blockchain-based energy trading platform

Oil Stock Markets

A consortium including energy companies BP and Royal Dutch Shell will develop a blockchain-based digital platform for energy commodities trading expected to start by end-2018, the group said on Monday. 

Other members of the consortium include Norwegian oil firm Statoil, trading houses Gunvor, Koch Supply & Trading, and Mercuria, and banks ABN Amro, ING and Societe Generale

Blockchain technology, which first emerged as the architecture underpinning cryptocurrency bitcoin, uses a shared database that updates itself in real-time and can process and settle transactions in minutes using computer algorithms, with no need for third-party verification.

Mercuria has been a vocal advocate of implementing blockchain technology to significantly cut costs in oil trading. 

Ideally, it would help to eliminate any confusion over ownership of a cargo and potentially help to make managing risk more exact if there are accurate timestamps to each part of the trade said Edward Bell, commodities analyst at Dubai-based lender Emirates NBD PJSC. 

Similar efforts for an energy trading platform have failed to take off, Bell said, but added this latest bid with backing from BP and Shell and the banks

The new venture is seeking regulatory approvals and would be run as an independent entity, the consortium said in a statement. 

The platform aims to reduce administrative operational risks and costs of physical energy trading, and improve the reliability and efficiency of back-end trading operations.