Due to the Mexican Tropical Storm Barry, oil prices surged on Friday. The US oil producers decided to reduce the Gulf of Mexico crude output by more than 50%.
Similarly to the U.S. Crude Oil WTI Futures, the International Brent Oil Futures also rose by 0.6% to $60.55 and $66.94 respectively.
As usual, a major weather phenomenon has the ability to impact oil production, imports and exports, refining and prices. As such, traders must continue to monitor the situation in the Gulf of Mexico until next week.
Meanwhile, according to a report released by OPEC on Thursday, oil demand will increase by 1.14 million barrels per day (BPD) next year. Likewise, non-OPEC supply is also expected to rise to an average of 2.44 million BPD in 2020.
At the same time, US crude production is likely to rise due to additional pipelines that will allow Permian crude to move towards the US Gulf coast export hub.
Moreover, the tension in the Middle East is contributing to maintaining the price of oil. This week, Iran tried to take control of a British tanker in the Persian Gulf as the latter was crossing into a passage of Hormuz area.
Asian Stocks Mixed This Morning
During early morning trades today, Asian stocks were mixed as trade tension resurfaced. Moreover, Singapore GDP data revealed to be worse than expected.
At 02:40 GMT, when Hong Kong’s Hang Seng Index rose by 0.3%, both the Shenzhen Component and China’s Shanghai Composite were up by 0.4%.
In addition, the US President on Thursday complained that China has not increased its purchase of American farm products despite agreeing to do so during last month’s meeting in Japan.
A report showed that China imported less of US agricultural products after the G-20 summit.
Consequently, Japan’s Nikkei 225 saw a minimal change, while South Korea’s KOSPI and Australia’s ASX 200 dropped by 0.1%.
At the same time, data disclosed that GDP in Singapore declined by 3.4% in the first three months of the year.
Brexit – No Deal: Boris Johnson Promise to Support British Farmers
Favourite to become the next Britain Prime Minister, Boris Johnson said that he will back the farm sector in case of a “No Deal”.
In the event that the UK goes out of the European Union (EU) without a deal, the union can impose high tariffs on UK exports.
Hence, according to Boris, they already have a plan to support the agricultural sector in case the EU decides to impose tariffs.
The Kingdom has enough funds and the plans to look after the farmers are there as per Boris.
Financial Events to watch for today
- 12:30 GMT – PPI (MoM) (Jun) [USA]