Oil in Global Economy Series: Billions of Barrels of Oil in Stock Pose Threat to Price Recovery

Except for the initial rise in prices, the OPEC and N-OPEC don’t seem to have much of an impact in the market so far and of the reasons for that has been the billions of barrels of oil sitting idle as stock, ready to be dispatched. Compared to these billions of barrels of oil and other petroleum products, the OPEC production is expected to reduce just 1.758 million barrels per day. If the demand doesn’t outpace the increase in supply significantly, then it is an affair of many months, before these high levels of inventory decline.

According to latest data from Energy information Administration (EIA), about 2.042 billion barrels of crude oil and other petroleum products are sitting as stocks in the United States. Some might point out that this number includes stocks under Strategic Petroleum Reserve (SPR) which is about 695.08 million barrels. But a new legislation introduced by Congress will lead to sales from Strategic Petroleum Reserve (SPR) too.

Since August last year, total stocks have declined by 26.6 million barrels but that is minuscule compared to the 370.7 million barrel increase since 2014 January to August 2016.

The material has been provided by InstaForex Company – www.instaforex.com

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Chinese Real Gdp Growth Likely to Decelerate to 6 Pct in 2018, Inflation to Hover Slightly Below 2.5 Pct

China’s real economic growth is expected to continue to slowdown gradually due to the current economic transitioning. Authorities have recently underlined stability over rapid economic growth, but fiscal stimulus injections in infrastructure woul…

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Uk Gilts Jump ahead of 30-Year Auction, Investors Eye Boe Governor Carney’s Speech

The UK gilts jumped Wednesday ahead of the 30-year super-long bond auction, scheduled to be held on Thursday. Also, investors will remain focused on the Bank of England (BoE) Governor Philip Lowes’s speech due on February 10.

The yield on the benchmark 10-year gilts, which moves inversely to its price, plunged nearly 2 basis points to 1.27 percent, the super-long 30-year bond yields also slumped nearly 2 basis points to 1.97 percent and the yield on the medium-term 4-year edged lower by nearly 1/2 basis point to 0.36 percent by 09:40 GMT.

Further, the UK gilts have been closely following developments in oil markets because of their impact on inflation expectations. The International benchmark Brent futures moved lower 0.78 percent to USD54.62 and West Texas Intermediate (WTI) fell 0.94 percent to USD51.68 by 09:40 GMT.

Lastly, investors also wait to note the country’s trade balance and manufacturing production data, besides Bank of England (BoE) Governor Mark Carney’s speech due on February 10.

Meanwhile, the FTSE 100 fell 0.08 percent to 7,180.25 by 09:40 GMT, while at 09:00GMT, the FxWirePro’s Hourly Pound Strength Index remained slightly bullish at 80.28 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

The material has been provided by InstaForex Company – www.instaforex.com

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