Oil Jumps On Hefty Crude Draw | OilPrice.com - OilPrice.com

The Energy Information Administration reported a huge oil inventory draw of 9.5 million barrels for the week to July 5, confirming and even exceeding the American Petroleum Institute’s estimate of an 8.13-million-barrel draw.

Today’s figure follows an estimated a 1.1-million-barrel draw in oil inventories for the last week of June.

In gasoline, the EIA reported a draw of 1.5 million barrels for last week, which compares with a draw of 1.6 million barrels a week earlier. Gasoline production averaged 10.4 million bpd, which compares with 9.9 million bpd a week earlier.

In distillate fuels, the authority reported an increase in inventories of 3.7 million barrels, versus a build of 1.4 million barrels for the previous week. Production last week averaged 5.4 million bpd, compared with 5.3 million bpd a week earlier.

As oil producers begin to evacuate staff from their platforms in the Gulf of Mexico ahead of a possible storm, oil prices continued upwards, booking their fourth consecutive daily gain in a row. Among the factors driving them higher, in addition to the now chronic Middle Eastern tension, was the news Russia’s oil production had fallen near a three-year low in June, later supported by API’s inventory report.

On the flip side for prices, worry about the direction the global economy is taking continues as persistent as the fears of an open military conflict in the Middle East only with a negative effect on prices.

As demonstrated after OPEC’s announcement about an extension to the 1.2-million-bpd production cuts into 2020, traders are too concerned with global economic growth and, consequently, crude oil demand. For now, this concern is keeping a lid on prices despite the recent rally.

At the time of writing, Brent crude was trading at US$65.98 a barrel, with West Texas Intermediate at US$59.52 a barrel. Both were up by almost three percent from yesterday’s close. This week’s hurricane updates will probably act as additional tailwind for WTI in the next few days and maybe into next week.

By Irina Slav for Oilprice.com

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2019-07-10 14:42:41Z
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Dow Jones Industrial Average Jumps on Federal Reserve Chair Jerome Powell Testimony - Barron's

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The Dow Jones Industrial Average has erased pre-open losses to gain more than 100 points following the release of the text of Fed Chair Jerome Powell’s prepared comments.

The Dow has advanced 111.72 points, or 0.4%, to 26,895.21, while the S&P 500 has risen 0.5% to 2993.75, and the Nasdaq Composite has gained 0.7% to 8199.59.

In the prepared text, Powell notes that investment has slowed because of trade fears, that economic growth may have slowed, and that uncertainties that have emerged since the May meeting have made the economic outlook more uncertain. “Apparent progress on trade turned to greater uncertainty, and our contacts in business and agriculture report heightened concerns over trade developments,” the text says. “Growth indicators from around the world have disappointed on net, raising concerns that weakness in the global economy will continue to affect the U.S. economy.”

To outside observers, this looks like preparation for at least one rate cut in July, and more to follow.

“Looks like we are going to get the ‘Dove’ Scenario,” writes NatAlliance Securities’ Andrew Brenner.

“Powell’s prepared testimony struck a decidedly dovish cord with ‘uncertainties’ over trade and global growth SINCE the June FOMC meeting characterized as having dimmed the outlook,” writes BMO’s Ian Lyngen.”

And the market apparently agrees.

Markets Now is a quick take on what’s happening with the Dow Jones Industrial Average and other major market indexes. Don’t forget to check out the rest of Barron’s markets coverage.

Write to Ben Levisohn at Ben.Levisohn@barrons.com

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2019-07-10 15:07:00Z
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S&P 500 hits 3,000 points for first time ever - CNN

Powell, who is beginning his biannual congressional testimony on Wednesday, pointed at economic crosscurrents, including "uncertainties around trade tensions and concerns about the strength of the global economy [that] continue to weigh on the US economic outlook." He also noted inflation continued to run below the Fed's target.

Investors read that as a sure sign that the Fed plans on cutting its interest rates at its next meeting later this month.

Stock futures had been in the red Wednesday morning but turned higher after the remarks were published ahead of the opening bell.

The S&P 500 (SPX) bounced 0.7% higher. The Nasdaq (COMP)was up 1%. The Dow (INDU) was up 0.7%, or 188 points, marking its first higher open in four days. The Dow logged its third consecutive close in the red on Tuesday.

Both the S&P 500 and the Nasdaq hit intra-day record highs just a few minutes into the trading day.

Market expectations of a near-term interest rate cut had dominated for weeks until last Friday's jobs report. The better-than-expected data suggested that the economy might not need the boost that a rate cut would provide.

On Tuesday, Philadelphia Fed President Patrick Harker said he didn't see any need for interest rate changes. He said he would consider a rate cut if the economy weakened substantially, according to The Wall Street Journal.

But Powell's remarks on Wednesday seemed to send a clear signal to the market. Expectations for a rate cut, measured by the CME's FedWatch tool, returned to 100%, with 84% expected a 25 basis point cut. It had slipped to 96% earlier Wednesday, after sitting at 100% for week.

Lower interest rate make it cheaper for companies to borrow money and are thus supportive for the stock market.

Powell's testimony will be followed by the minutes of the Fed's June meeting, which will be released at 2 pm ET. On Thursday Powell will appear before the Senate Banking Committee.

Yields on US government debt, which is in part driven by interest rate expectations, dropped initially on Powell's remarks but bounced back. The 10-year US Treasury yield is little changed at 2.0647%.

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2019-07-10 14:14:00Z
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Oil gains on API stockdraw, Gulf of Mexico storm - CNBC

A Petrobras oil platform floats in the Atlantic Ocean near Guanabara Bay in Rio de Janeiro.

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Oil prices rose more than 2% on Wednesday after industry data showed U.S. inventories fell more than expected, while major U.S. producers evacuated rigs in the Gulf of Mexico ahead of a storm.

U.S. West Texas Intermediate crude futures climbed $1.37 to $59.20, after hitting a session high of $59.18.

Brent crude futures were up $1.45 at $65.61, down from a session high of $65.47.

Data from the American Petroleum Institute (API) on Tuesday showed U.S. crude inventories fell by 8.1 million barrels in the week to July 5 to 461.4 million, compared with analyst expectations for a decrease of 3.1 million barrels.

Official figures from the government's Energy Information Administration (EIA) are due later on Wednesday.

"Prices are finely balanced right now as investors await fresh stimulus," said Fawad Razaqzada, technical analyst at FOREX.com. "The stimulus could come in the form of a sharp change in U.S. crude oil inventories."

Meanwhile big oil companies began evacuating and shutting in production in the Gulf of Mexico after weather forecasts warned that a tropical disturbance might become a storm later on Wednesday or Thursday.

Chevron Corp, Royal Dutch Shell, BP and BHP Group Ltd are removing staff from 15 offshore energy platforms. Exxon Mobil Corp said it was "closely monitoring" the disturbance to determine if its facilities might be affected.

The Gulf of Mexico is home to 17% of U.S. crude oil output which stands at around 12 million barrels per day (bpd).

"Assuming that it 1/8the storm 3/8 will cause some evacuations, then you would expect it to have a limited short-term impact but perhaps it's a bit too early to say" said Paul Horsnell, head of commodities research at Standard Chartered.

The U.S. and global benchmarks have gained this year as the Organization of the Petroleum Exporting Countries (OPEC) and big producers such as Russia have curbed output to bolster prices.

The alliance, known as OPEC+, agreed last week to extend their supply-cutting deal until March 2020. Tensions around Iran's nuclear program and recent incidents involving oil tankers have also supported prices.

Iran's President Hassan Rouhani said on Wednesday Britain would face "consequences" over the seizure of an Iranian oil tanker near the coast of Gibraltar last week.

Oil prices have been under pressure from uncertainty over the outlook for global economic growth because of fallout from the U.S.-China trade war as well as record oil supply growth.

The EIA on Tuesday revised its U.S. crude oil production forecast for 2019 to an all-time high of 12.36 million bpd.

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2019-07-10 11:09:34Z
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Deutsche Bank is being slammed for paying $52 million 'golden parachutes' to fired execs — right after ma.. - Business Insider

Deutsche Bank is being slammed for handing out 'golden parachutes' while junior staff get the axeChinaFotoPress/Getty Images

• Deutsche Bank is being slammed for paying out millions to departing senior managers.
• A picture of two men thought to be fired Deutsche bankers went viral on Twitter, after they were photographed leaving the bank bags in hand. 
• It turns out they were fitting $1,800 suits for the German bank's directors, all while hundreds of staff were being fired. 
• Deutsche earlier this week announced a massive overhaul which would over the next few years cut 18,000 jobs.
• Read more stories on Markets Insider.

---

Deutsche's overhaul just seems to keep getting messier.

On the morning of the announcement that 18,000 jobs were being cut, the bank's managing directors were having suits fitted worth over $1,800. Adding to the sting, the Financial Times reported on Wednesday that some executives were paid £52 million in "golden parachute" severance packages. 

The Financial Times reported that the bank has spent more than €52 million on payouts to departing senior staff since May 2018. The FT said that is almost equal to the whole management board.

Gerhard Schick, head of lobby group Finance Watch Germany called the payments "inappropriate."

"Golden parachutes for failed managers while thousands of employees are losing their jobs just do not match," Schick told the Financial Times. 

Suited while employees get booted

It's a "Let them eat cake" moment for the bank, which was seen as being tone deaf to the gloom of junior staff when on Tuesday Financial News reported that a viral photo of what many thought were fired employees actually were tailors fitting out lavish suits for executives. 

The photo went viral on Twitter, and was used by The Financial Times, Guardian and Reuters as well as Business Insider. 

Ian Fielding-Calcutt and Alex Riley, who work for Fielding & Nicholson Tailoring, had been fitting suits for senior directors unaffected by the cuts. 

Fielding and Nicholson/ Twitter

Fielding and Nicholson/ Twitter

Fielding-Calcutt told Financial News: "Our timing was not great," and that he had been fitting suits for managing directors at the bank for more than a decade. 

He added: "Almost 30% of our business comes from investment bankers. I think a lot of the people getting laid off were traders of some sort, who don't wear suits, and so we just went ahead as normal with our clients who obviously weren't affected by the cuts."

The German bank's turbulent 14 months culminated in 18,000 jobs being cut across its offices from Sydney to New York.

Deutsche Bank's severance payments started with John Cryan, the former CEO getting nearly a €11 million pay off. After that six more board members left,  cashing in on at least €41 million according to the Financial Times. 

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2019-07-10 09:11:04Z
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Dow futures slightly lower ahead of Fed Chair Powell's testimony - CNBC

U.S. stock index futures were slightly lower Wednesday morning, as market participants eagerly anticipated comments from the world's most powerful central banker.

At around 05:30 a.m. ET, Dow futures slipped 40 points, indicating a negative open of more than 41 points. Futures on the S&P and Nasdaq were both seen slightly lower.

Market focus is largely attuned to the testimony of Federal Reserve Chairman Jerome Powell, with investors anxious to learn whether he will confirm or confound expectations for U.S. policy easing this month.

Over the next two days, Powell is expected to talk about slowing economic activity and increased risks — showing that the Fed is ready to cut interest rates as needed.

However, Powell is also likely to keep the markets — and the White House — guessing about how soon and how deep the Fed intends to trim rates, when it meets at the end of July. The prevailing view, priced into the futures market, is for a 100% chance of a quarter point rate cut July 31.

Overnight, Atlanta Fed President Raphael Bostic said the U.S. central bank was debating the risks and benefits of letting the world's largest economy run "a little hotter."

On the data front, wholesale trade figures for May will be released at around 10:00 a.m. ET.

In corporate news, AngioDynamics and MSC Industrial Direct are both set to report their latest quarterly earnings before the opening bell.

AAR, Bed Bath & Beyond and PriceSmart are scheduled to release their corporate results after market close.

— CNBC's Patti Domm contributed to this report.

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2019-07-10 07:01:04Z
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Dow futures slightly lower ahead of Fed Chair Powell's testimony - CNBC

U.S. stock index futures were slightly lower Wednesday morning, as market participants eagerly anticipated comments from the world's most powerful central banker.

At around 03:35 a.m. ET, Dow futures slipped 63 points, indicating a negative open of more than 64 points. Futures on the S&P and Nasdaq were both seen slightly lower.

Market focus is largely attuned to the testimony of Federal Reserve Chairman Jerome Powell, with investors anxious to learn whether he will confirm or confound expectations for U.S. policy easing this month.

Over the next two days, Powell is expected to talk about slowing economic activity and increased risks — showing that the Fed is ready to cut interest rates as needed.

However, Powell is also likely to keep the markets — and the White House — guessing about how soon and how deep the Fed intends to trim rates, when it meets at the end of July. The prevailing view, priced into the futures market, is for a 100% chance of a quarter point rate cut July 31.

Overnight, Atlanta Fed President Raphael Bostic said the U.S. central bank was debating the risks and benefits of letting the world's largest economy run "a little hotter."

On the data front, wholesale trade figures for May will be released at around 10:00 a.m. ET.

In corporate news, AngioDynamics and MSC Industrial Direct are both set to report their latest quarterly earnings before the opening bell.

AAR, Bed Bath & Beyond and PriceSmart are scheduled to release their corporate results after market close.

— CNBC's Patti Domm contributed to this report.

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2019-07-10 06:51:57Z
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