Builders of homes perkier in survey
U. S. homebuilders are feeling more optimistic about their business prospects, reflecting a recent surge in sales of newly built homes and a lingering shortage of previously occupied homes on the market.
The National Association of Home Builders/ Wells Fargo builder sentiment index released Monday rose to 70 this month. That’s up 2 percentage points from 68 in April.
Readings above 50 indicate more builders view sales conditions as good rather than poor. The index has been above 60 since September. It hit 71 in March, the highest level since June 2005 during the height of the last housing boom.
The May index exceeded analyst predictions, which called for the reading to hold steady from last month, according to FactSet.
Readings gauging builders’ view of sales now and over the next six months also rose from last month, while a measure of traffic by prospective buyers
the U. S. Commodity Futures Trading Commission show. Money managers’ West Texas Intermediate net- long positions fell by 34,290 positions to 168,814, futures and options in the week ended May 9. Netlong positions on Brent fell by 41,879 lots to 280,678.
“The drop in net- length set the stage for the rally,” said Tamar Essner, a New York- based energy analyst at Nasdaq Inc. “Nobody wants to be short going into the OPEC meeting.”
Extending the cuts at already agreed- upon volumes is needed to reach the goal of trimming global stockpiles to the five- year average, the energy ministers of the world’s biggest oil producers said in a joint news conference. They will present their view at a Vienna summit of OPEC and other exporters May 25.
“Preliminary consultations show that everybody is committed” to the output agreement, said Novak. “I don’t see reasons for any country to quit.”
OPEC members agreed in November to cut output by 1.2 million barrels a day. Several nonmembers, including Russia, reached an accord in December to contribute a combined 600,000 barrels a day of reductions.
Not everyone is on board yet. Kazakhstan, the biggest producer in the former Soviet Union after Russia, isn’t ready to join an extended accord automatically, Energy Minister Kanat Bozumbayev said Monday, according to Interfax. The Central Asian nation will discuss its level of participation at the Vienna gatherings May 24 and 25, the news service reported, citing the minister.
“It’s a powerful signal when Saudi Arabia and Russia come out together,” Essner said. “They are the most important countries taking part and without their agreement you would not be able to get other countries to come onboard. An extension through the end of the year was widely expected, yet garnering little traction in price, so they must have figured that they had to up the ante for the market to take them seriously.”
Amid the cutbacks, U. S. production has risen to the highest level since August 2015. Output is poised to climb further in the months ahead as U. S. explorers stage the longest drilling ramp- up since 2011.
“This is bullish because they are going to extend the cuts longer than was expected,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $ 3.4 billion. “It’s also bullish for oil producers here. They will keep investing, drilling and building pipelines in the U. S.”