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By Adam Montana
Published: May 19, 2017 6:12 a.m. ET
AFP/Getty Images Saudi Arabia's minister of energy Khalid A Al-Falih in Vienna, on June 2, 2016. By
MARKETS REPORTER BIMANMUKHERJI
Oil futures moved sharply higher on Friday, as investors showed some optimism about what will come out of next week’s meeting of the Organization of the Petroleum Exporting Countries.
Up for final discussion by the cartel is whether to extend the current six-month production-cut deal beyond the mid-2017 expiration, and if so, for how long and whether the reductions should be increased.
It is widely expected an extension will occur, and energy officials from Saudi Arabia and Russia this week signaled they back a nine-month extension. That helped give oil a start-of-week gain that’s been built on since, putting crude on pace to modestly top the 3.5% jump logged last week.
After settling Thursday at three-week highs, light, sweet crude futures for delivery in June CLM7, +1.64% jumped 59 cents, or 1.2%, to $49.93 a barrel. The contract briefly topped $50 a barrel for the first time since April, according to FactSet data.
July Brent crude LCON7, +1.77% on London’s ICE Futures exchange also gained 59 cents, or 1.2%, to $53.10 a barrel.
Li Li, energy research director at ICIS China, attributed Friday’s advance to pre-meeting optimism, but said she doesn’t “expect prices to jump hugely from the current trading range.”
The presidential election in Iran was also grabbing oil trader’s attention on Friday. Commerzbank analysts said the result could have “major consequences for the oil market” if conservative cleric Ebrahim Raisi wins the vote. Raisi and reform-oriented incumbent Hassan Rouhani are leading the polls.
Read: Iranians head to the polls in high-stakes presidential election
Raisi has expressed criticism of the nuclear agreed in 2015 that paved the way for the U.S.-led sanctions to be lifted and allow Iran to sell oil on the international energy markets.
If Raisi wins “the agreement in its current form would risk being overturned. New sanctions would then very likely be imposed by the US and the West, which could reduce the oil supply from Iran even in the short term,” the Commerzbank analysts said.
“An election victory for Raisi would therefore drive oil prices up noticeably,” they added.
Read: The overlooked upside for oil in Iran’s election
Later on Friday, oil prices would also be steered by the latest weekly U.S. rig-count data from Baker Hughes. That report has shown 17-straight weeks of growth in active oil-drilling rigs.
But government figures on Wednesday showed the first week-to-week drop in domestic oil production since February, a development which also helped lift crude prices this week and get light, sweet crude back toward $50.
To some, the past two weeks’ price rebound was to be expected after April’s slide. That drop “was a case of sentiment over substance,” said BMI Research. It sees more price gains to come the next several months, but they “are more likely to be incremental rather than exponential.”
As for oil products, Nymex June gasoline futures RBM7, +1.72% rose 1% to $1.62 a gallon, while ICE gasoil gained 1% to $469.75 per metric ton.
Natural gas futures NGM17, +2.36% advanced 0.8% to $3.21 per million British thermal units.
By Half Crazy Runner
Can anyone explain to me why must they pass the HCL law before there can be a revaluation of the dinar? What is the connection? It certainly doesn’t look like the GOI will ever agree on this or even bring it up for a vote. They keep pushing it off to the “next session” year after year... Is it at all possible that we can ever see an RV without the HCL law passing?
We have on this web site a plethora of information from years of research. I would like to start a discussion about possible time frames for an RV, RI, or float. Where ever you stand about what may happen, let's here it. Please only bring your opinion if it can be backed up by any evidence. Most of us have read most of what has been written about the dinar. Please don't bring up rates, just a probable time frame for what most of us wait for.
Me first and why. I believe that from all the information I have read, within the 1st quarter of this year the dinar will go international. Honestly I thought it would have happened by now. My number 1 reason for my belief is that the corruption associated with the currency auction is widely publicized and must end. Al Abadi runs for re election against corruption, its has to end. IMO, al abadi should be nominated for the Nobel peace prize. Is he without sin....no, he is undoubtedly the best anyone could hope for.
Please share your opinion on time frame and why. Thanks for sharing.
Luigi says... If these guys know what they are talking about, the RV will have a slow gradual increase, not an overnight event. If true, exchange enough to get you by, then hold off for 90 days for the big payload. What say you? Not verified. Your opine. 10-17-2017 Intel Guru Frank26 IMO...THE RI IS COMING...AND INTROS A FREE FLOAT...THEN FOR ABOUT 70 TO 80 DAYS LATER THEY WILL CAP WITH A CONTROLLED FLOAT OF THE RV... [RI to a free float, then to a cap where it will be managed. Once they reach the cap rate, do you think it will stay in that range or drop back down?] FIRST OF ALL...RI IS THE FREE FLOAT... NOT TO IT...TIME IS NOT REQUIRED FOR THAT PHASE...SECOND ...ONCE CAPPED AT PEAK OF RV IS BECAUSE THE IQD WILL...NEVER NEVER NEVER EVER GO DOWN ONCE AT RI / RV. [Is the RV the same as an international rate?] WELL...I SUPPOSE...FOR AN RV INTRODUCES THE IQD TO THE INTERN MARKETS THAT WANT TO GET THEIR HANDS ON IT TO USE IT IN TRADE ...BUYING AND SELLING WHICH WILL ROCKET THE VALUE OF THE IQD INTERNATIONALLY. [This is not meant to be a rate...What opinion do you...have that will be the high vs low for Iraq’s currency at his peak rate post RV?] IMO...RI 1 RV 4... 10-16-2017 Newshound/Intel Guru Randy Koonce So learning from the mistake that Kuwait made, the CBI said the 'Float' will be 'Managed'... What does Managed mean?... if you look at the currency now and realize it has been this price for at least 10 years - that's a Managed Float! ... They control the rate.... they peg it off of the Dollar and the British Pound so that it will not move unless they want it to. Which is the reason they will need to RV the currency to get the rate they need...Are there any Laws that need to be passed before they let this go? NO! Everything is just waiting on Iraq to do this 'Thing'! Do not get discouraged! Just put on your big girl panties (or big boy, as the case may be) and let this happen. Be happy about the timing... We are close. Every large bank will exchange.. RELAX the RV is coming... Breathe,,, Check www.cbi.iq every day to see if it has changed.
Treat this article as a rumor.
Not verified. Your reaction.
20 Aug 2017 Delta....
Over a 73 million dollar increase in foreign currency holdings and about 9 million in gold reserves increased.......somebody knows how to make money….All the while they dropped around 40 million in debt.......very productive month, many companies wish they can have this kind of operation.
Sirenfire: That is VERY COOL... a 1.7 billion dollar credit is showing in july for current year revaluation!!!!! WOOHOOO PLUS currency issuance expenses for print NEW DENOMSSSSSS BAM spent over 5 mill printing new denoms in July... I would say we are READY BABY!!!
Delta: 5 MILLION PER MONTH FOR NEW CURRENCY FOR LAST 3 MONTH, AND BECAUSE OF THE REVALUATION THEY ARE GETTING SURPLUS ...GOOOOOOOO...........CBI....
Frank26: TY for bring this to our ATTENTION DELTA !!!