Crude oil posts best monthly gain in six years
Crude
Oil had its best monthly gain in six years, with the two global benchmarks for crude rising between 20 and 25 percent in April, helped by a weaker US Dollar and bets that a supply glut would ease. On the New York Mercantile Exchange, crude oil settled at USD59.15 a barrel, rising by USD2.00. In London, Brent crude settled at USD66.46, the contract increased by USD1.18. NYMEX RBOB gasoline settled at USD2.0453 a gallon, for the week, the contract rose by USD0.04.
US natural gas futures gained on a slightly smaller-than-expected storage build despite forecasts for warmer weather and weaker demand over the next two weeks. The US Energy Information Administration (EIA) said utilities added 81 billion cubic feet (bcf) of gas into storage during the week ended April 24, slightly less than analysts’ estimates of 85 bcf in a Reuterís poll. That compared with builds of 90 bcf last week, 77 bcf a year earlier and a five-year average increase of 55 bcf. Front-month gas futures on the New York Mercantile Exchange closed UP at USD2.776 per million British thermal units.
Iraq’s oil exports rose in April to a record 3.08mnbpd from 2.98mnbpd in the previous month, the oil ministry said. Exports from Iraq’s southern terminals reached 2.627mnbpd, while exports from the north via the Kurdistan pipeline were 0.45mnbpd in April. April shipments generated USD4.8bn in revenue and sold at USD51.70 per barrel. gain versus the US Dollar in six weeks on signs the European Central Bankís (ECB) stimulus plan has the regionís economy ready to generate stronger growth and inflation. US first-quarter economic growth was slower than forecast, meanwhile, fanning speculation the Federal Reserve wonít rush to raise interest rates. Euro strengthened 4 percent against the Yen this week, the biggest gain in two years.
US
The Federal Reserve pointed to weakness in the US labor market and economy. The Fed’s policy statement puts it on track to begin a meeting-bymeeting approach toward deciding when to pull the trigger on its first rate hike since June 2006. The central bank, however, acknowledged soft patches across the economy, making it more likely that it will not be ready to hike rates until at least September.
US economy skidded to a near halt in the first three months of the year, battered by a triple whammy of harsh weather, plunging exports and sharp cutbacks in oil and gas drilling. The overall economy grew at a barely discernible annual rate of 0.2 percent in the January-March quarter. That is the poorest showing in a year and down from 2.2 percent growth in the fourth quarter. Plummeting exports pulled growth down by nearly a full percentage point. The category that includes investments in oil and gas exploration drilling plunged 48.7 percent. Consumer spending slowed sharply as a severe winter kept shoppers home.
US services sector expansion eased slightly in April from a seven-month high in March on a dip in new business growth, but the pace of hiring in the sector accelerated to its highest since last June. Financial firm Markit said its “flash,” or preliminary, reading of its Purchasing Managers Index for the services sector slipped to 57.8 in April from a final reading of 59.2 in March, which had been the highest level since August.
The pace of US manufacturing growth held at its slowest in almost two years in April, as a rebound in new orders was offset by employment shrinking to its lowest level in more than five years, the Institute for Supply Management (ISM) said. Its index of national factory activity was 51.5 in April, matching the March reading, which had been the lowest since May 2013. The reading fell shy of expectations of 52.0, according to a Reuterís poll of economists.
Contracts to purchase previously owned US homes rose in March to their highest level since 2013. The National Association of Realtors said its pending home sales index rose 1.1 percent last month. Economists polled by Reuters had forecast a 1 percent gain. The increase last month put contract signings, which usually turn into sales after a month or two, at their highest level since June 2013.
US consumer confidence fell this month to the lowest level in four months, knocked down by a slowdown in hiring. The Conference Board says its consumer confidence index fell to 95.2 in April from 101. 4 in March, the lowest reading since December’s 93.1.
Europe
The pace of improving economic confidence in the Euro-zone’s economy took a breather in April, dipping slightly, but the service sector was more sprightly and morale among businesses overall increased. The European Commission’s economic sentiment indicator fell by 0.2 points to 103.7, worse than the 103.9 that economists had forecast in a Reuters poll. Business morale improved by 0.09 points to 0.32. Services confidence improved by 0.6 points.
The Euro-zone ended four months of deflation in April with consumer prices unchanged from year-ago levels. Consumer prices were unchanged in April from a year earlier, as expected, after a 0.1 percent decline in March. Economists have said inflation should become clearly positive in the second half of 2015 as energy becomes less of a drag given that oil prices started falling sharply from June last year. In another slightly positive sign for the Euro-zone economy, unemployment fell marginally in March by 36,000 to 18.105mn people. However, this was not enough to change the unemployment rate from the 11.3 percent of February. Economists had been expecting the rate to drop to a new three-year low of 11.2 percent.
German annual consumer prices rose by 0.3 percent in April when harmonized to compare with other European countries, climbing more sharply than forecast and remaining above zero for a second month running, preliminary data showed on Wednesday. The Reuters consensus forecast had been for harmonized prices to increase by 0.2 percent on the year after they rose
by 0.1 percent in March.
Japan
The Bank of Japan trimmed its consumer price forecasts and pushed back the timeframe for its ambitious inflation target but refrained from expanding its already massive stimulus programme, predicting a recovering economy will gradually nudge prices higher. Inflation is now expected to hit the 2 percent target around the half year from April to September 2016, the BOJ predicted, watering down the forecast that the target would be met around the current fiscal year, which began this month.
Japanese industrial output fell 0.3 percent in March, declining for a second straight month. The fall was smaller than a median market forecast for a 2.3 percent drop. Manufacturers surveyed by the Ministry of Economy, Trade and Industry expect output to rise 2.1 percent in April and decline 0.3 percent in May.
China
Profits earned by Chinese industrial firms fell 0.4 percent in March from a year earlier to CNY508.61bn (USD82.09bn). That compared with a 4.2 percent YoY fall in the first two months of this year. For the first quarter of this year, profits are down 2.7 percent from a year earlier to CNY1.25tn.
Activity in China’s manufacturing sector barely grew in April, holding slightly above the level separating expansion from contraction. The official PMI stood at 50.1 in April, identical to the previous month’s reading. Analysts polled by Reuters had predicted a reading of 50 as activity in the world’s second-largest economy continues to cool.
India
India’s annual infrastructure output growth contracted 0.1 percent in March, mainly dragged down by lower production of steel and cement. The output expanded 3.5 percent for the fiscal year 2014/15 ending March, compared with 4.2 percent in the previous year. The infrastructure sector, which comprises coal, crude oil, oil refining, natural gas, steel, cement, electricity and fertilizers, accounts for 37.9 percent of India’s industrial output.