Oil prices rise with Libya's force majeure and emerging slowdown in demand held back markets.

Oil Stock Markets

Oil prices climbed on Tuesday after Libya declared force majeure on some of its supplies, although an overall rise in OPEC output and an emerging slowdown in demand held back markets. 

Brent crude oil futures LCOc1 were at $77.71 per barrel at 0217 GMT, up 41 cents, or 0.5 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 57 cents, or 0.8 percent, at $74.51.

OPEC’s June output was 32.32 million barrels per day (bpd), a Reuters survey showed on Monday, up 320,000 bpd from May. The June total is the highest since January 2018.

Libya’s National Oil Corporation (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in total production losses of 850,000 bpd due to the closure of eastern fields and ports.

Traders have also been watching U.S. oil production C-OUT-T-EIA, which has surged by 30 percent over the last two years to 10.9 million bpd, absorbing some of the recent disruptions.

Overall, however, analysts said OPEC’s production policy as well as unplanned supply disruptions
were currently the main price drivers.

“In the near-term, the level of OPEC production - deployment of spare capacity by Saudi Arabia, Iraq, UAE, Kuwait (and ex-OPEC by Russia), and involuntary disruptions in Libya, Venezuela, Iran - are more important drivers of crude prices,” Goldman Sachs said in a note published late on Monday.

What has become a concern, at least for producers, is a slowdown in demand which may end years of consecutive records.

In Asia, the world’s top oil consuming region, seaborne oil imports have been falling since May, as higher costs turned off consumers and as the escalating trade dispute between the United States and China starts to impact the economy.

Things to watch on the ASX today

Australian Stock Markets

Will the market be able to bounce back on Tuesday? Here are five things that could shape today’s trade:

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) started the new financial year with a day in the red on Monday. It gave back its early gains to finish the day down 0.3% to 6,177.8 points.

ASX expected to open the day higher.

According to the latest SPI futures, the local market is expected to open the day higher by 0.3% or 21 points on Tuesday. This follows a positive night of trade on Wall Street which saw U.S. markets rebound from early declines to push notably higher. The Dow Jones Industrial Average rose 0.15%, the S&P 500 climbed 0.3%, and the NASDAQ pushed almost 0.8% higher.

Reserve Bank of Australia meets today.
The Reserve Bank of Australia will meet at 14:30 AEST today to discuss the cash rate. Think there is not a single economist in the country that expects the central bank to make a move on rates.

In fact, the consensus appears to be for rates to remain on hold at the record low of 1.5% until at least the end of 2019.

Toll road operator Atlas Arteria announces fees.

The shares of Atlas Arteria Group (ASX: ALX), formerly known as Macquarie Atlas Roads, will be on watch on Tuesday after providing its final performance fee. According to the release, a final performance fee was earned by Atlas Arteria’s manager, Macquarie Fund Advisers, for the 12 months ended 30 June 2018.

During this period, the company outperformed the S&P/ASX 300 Industrials Accumulation Index by 10.8%, resulting in a 2018 performance fee of $54.7 million. The 2018 performance fee will be payable in one instalment.

Oil prices give back gains.
Oil prices have taken a tumble overnight after data revealed a surprise rise in output from Saudi Arabia and Russia. The WTI crude oil price has fallen 0.1% to US$74.06 a barrel and the Brent crude oil price is down 2.3% to US$77.39 a barrel.

This could put pressure on the shares of Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL).

Amaysim shares tipped as a buy.
According to a note out of Goldman Sachs, its analysts have retained their buy rating and placed a $1.30 price target on Amaysim Australia Ltd (ASX: AYS) shares.

Despite the company suffering a slowdown in subscriber growth, the broker sees a lot of value in its shares at the current level.

ASX Shares that are climbing high today

Australian Stock Markets

Four shares that are climbing more than most today are listed below. Here’s why they are storming higher 

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has bounced back from yesterday’s decline with a push higher on Tuesday. In afternoon trade the benchmark index is up 0.5% to 6,208.6 points.

The A2 Milk Company Ltd (ASX: A2M) share price has climbed 4% to $10.80 after announcing a variation to its manufacturing and supply arrangements with Synlait Milk Ltd (ASX: SM1).

According to the release, the two parties have signed a new minimum term of five years to 31 July 2023, with an increase in volume of infant formula products over which Synlait has exclusive supply rights.

Synlait will increase its committed production capacity and pricing terms will reflect the commitment from both companies to an ongoing market-competitive pricing regime.

The FlexiGroup Limited (ASX: FXL) share price has pushed 4% higher to $2.27 after being the subject of a positive broker note out of Credit Suisse.

According to the note, the broker has upgraded the financial services company’s shares to an outperform rating with a $2.45 price target on the belief that it has a chance of meeting its earnings forecasts in FY 2018.

The InvoCare Limited (ASX: IVC) share price is up 2% to $14.00 after the funerals company announced yet another acquisition.

It has signed an agreement to buy Lester & Son in Albury-Wodonga. This is the leading funeral business on the New South Wales and Victoria border and is part of the company’s strategy of expanding its presence in regional markets.

The Treasury Wine Estates Ltd (ASX: TWE) share price is up 2% to $17.48.

This week the wine company’s shares were given an overweight rating and $20.00 price target by analysts at Morgan Stanley. The broker believes that the recent China-related selloff has brought the wine company’s share price down to an attractive level.

Oil prices fall admist increasing Saudi output & Asian economic slowdown

Oil Stock Markets

Oil prices fell by more than 1 percent on Monday as supplies from top exporter Saudi Arabia rose and as signs of an economic slowdown in Asia dented the outlook for demand. 

Brent crude oil futures LCOc1 were at $78.16 per barrel at 0316 GMT, down $1.07, or 1.35 percent, from their last close.

U.S. West Texas Intermediate crude futures CLc1 were down 94 cents, or 1.3 percent, at $73.21 a barrel, after rising more than 8 percent last week.

U.S. President Donald Trump wrote in a tweet on Saturday that Saudi Arabia’s King Salman bin Abdulaziz Al Saud had agreed to produce more oil. The White House later walked back on the president’s comments, saying the king said his country can raise oil production if needed.

Saudi Arabia’s output is up by 700,000 barrels per day (bpd) from May, a Reuters survey found on Friday, and close to its 10.72 million bpd record from November 2016, more than making up for disruptions elsewhere within the Organization of the Petroleum Exporting Countries (OPEC).

Voluntary supply cuts by OPEC and some non-OPEC suppliers like Russia have tightened world oil markets since 2017, and unplanned disruptions from Canada to Venezuela and Libya along with upcoming new U.S. sanctions against major exporter Iran have sparked concerns of supply shortfalls.

Despite the apparent supply relief from Saudi Arabia, oil markets remain tense over escalating trade disputes between the United States and other major economies including China, the European Union, India and Canada.

Asia’s main economic hub around China, Japan and South Korea all reported a slowdown in export orders in June amid an escalating trade dispute with the United States.

Trump warned close U.S. allies in an interview that aired on Sunday with a threat to sanction European companies that do business with Iran.

Oil markets are also awaiting the impact of looming U.S. sanctions against major exporter crude Iran.

Five things to watch on the ASX on Monday

Australian Stock Markets

On Friday the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) finished the financial year with a whimper when it gave back its earlier gains to finish the day down 0.3% at 6,194.6 points.

Will the market be able to start the new financial year in style on Monday? Here are five things to watch:

The ASX is expected to open higher.

The local market is expected to open the day higher on Monday. According to the latest SPI futures, the S&P/ASX 200 is poised to open 23 points or 0.4% higher following a positive end to the week on Wall Street.

The Dow Jones Industrial Average finished the week with a 0.2% gain, the S&P 500 was up 0.1%, and the NASDAQ was 0.1% higher.

Oil prices have continued to rise.

Australian energy producers such as Oil Search Limited (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could be set for another positive day of trade after the price of U.S. crude settled above US$74.00 for the first time since November 2014.

Prices have been rising after sanctions against Iran threatened to remove a substantial volume of oil from world markets. WTI crude closed up 1% at US$74.15 a barrel and Brent crude was up 2% to US$79.44 a barrel. The latter is closing in on a three and a half year high.

Aluminium prices slide.

According to the London Metal Exchange, the aluminium price dropped lower on Friday. Aluminium closed the week with a 1% decline to US$2,159 a tonne, which could put pressure on the Alumina Limited (ASX: AWC) share price today.

CSL and ResMed rated as buys.

The shares of CSL Limited (ASX: CSL) and ResMed Inc (ASX: RMD) could be on the rise on Monday after they were the subject of positive broker notes out of Goldman Sachs.

The broker has initiated coverage on both companies with buy ratings.

Ramsay Health Care rated as a sell.

Ramsay Health Care Limited (ASX: RHC) shares, on the other hand, could be set for another day in the red after Goldman Sachs initiated coverage on the private hospital operator with a sell rating.

It is concerned that hospitals face industry headwinds which are expected to unwind over several periods.

Why these 4 ASX shares are starting the week on a high

Australian Stock Markets

Four shares that have climbed more than most today are listed below. Here’s why they have started the week on a high:

In afternoon trade the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is fading but is still on course to make a positive start to FY 2019. At the time of writing it is up 0.1% at 6,201.2 points.

The EBOS Group Ltd (ASX: EBO) share price has surged almost 5% higher to $17.67 after it announced that it has won the tender to act as the exclusive third party distributor of pharmaceutical products to more than 400 Chemist Warehouse and My Chemist stores in Australia.

The five-year deal is expected to generate sales of approximately A$1 billion in the first year of the agreement.
 
The EML Payments Ltd (ASX: EML) share price has jumped 8% higher to $1.52 after entering into a multi-year agreement with UK-based GVC Holdings for the provision of branded reloadable cards for their European online gaming brands.

No financial details have been provided, but management expects the gross debit volume to revenue conversion ratio to be materially in line with other reloadable card programs the group operates.

The Mitula Group Ltd (ASX: MUA) share price has pushed 3.5% higher to 74 cents after its takeover approach moved a step closer to completion. According to today’s release, the shareholders of LIFULL Co have met and approved the issue of shares to Mitula shareholders in connection to the proposed scheme of arrangement.

The scheme remains subject to approval by Mitula shareholders, approval by the Supreme Court of Victoria, and other customary conditions.

The Yancoal Australia Ltd (ASX: YAL) share price has climbed 3.5% to 14.5 cents after the coal miner announced that it has applied for a dual listing on the Hong Kong Stock Exchange.

Management advised that it has applied for the dual listing in the interests of increasing liquidity in its shares and to help further diversify its investor base. It also announced an impending capital raising, though no details were provided.

Oil climbs as market tightens on lost supply

Oil prices rose on Friday as U.S. sanctions against Iran threatened to remove a substantial volume of crude oil from world markets at a time of rising global demand.

Benchmark Brent crude LCOc1 jumped $1.49 to a high of $79.34 a barrel before easing back to around $79.00 by 1030 GMT.

U.S. light crude CLc1 was down 15 cents at $73.30. On Thursday, the contract hit its highest since November 2014 at $74.03 per barrel.

Iran is the fifth-largest oil producer in the world, pumping about 4.7 million barrels per day (bpd), or almost 5 percent of world’s oil, much of it to China and other energy-hungry nations such as India.

The U.S. government wants to stop Tehran exporting oil to cut off a vital supply of finance and hopes other big oil producers in the Organization of the Petroleum Exporting Countries and Russia will make up for the deficit.

But the world oil market is already tight and many analysts and big investors think strict enforcement of U.S. sanctions against Iran will push up prices sharply.

A Reuters survey of 35 economists and analysts on Friday forecast Brent would average $72.58 a barrel in 2018, 90 cents higher than the $71.68 forecast in last month’s poll and compared with the $71.15 average so far this year.

North American oil stocks have fallen as an outage at Canada’s Syncrude has locked in more than 300,000 bpd of production. The outage is expected to last at least through July, according to operator Suncor Energy

OPEC and Russia have said they will raise output to meet demand and replace crude from unplanned disruptions but many analysts think that the extra supply may be inadequate.