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Daily summary: Oil declines support gains on Wall Street

19:05 22 November 2023
  • The mood in the European session was mixed today. The DAX gained 0.36%, with Thyssenkrupp posting record highs among German companies. The company reported a sizable loss for fiscal year 2022 but expects a net profit next year and EBIT growth.
  • Major indexes on Wall Street are trading higher. The Nasdaq gains 0.67%, the S&P 500 adds 0.48% and the Dow Jones is trading 0.47% higher. The upward momentum is modest, however the direction is kept. 
  • Nvidia shares are down 1.6% despite higher-than-expected earnings and revenue guidance for the current final quarter of 2023. The company warned of a drop in chip sales to China, due to U.S. export sanctions.
  • Consumer sentiment according to the University of Michigan came in slightly above forecasts, at 61.3 points vs. 60.4 expected. 5-year inflation expectations were 3.2% vs. 3.2% expected and 3.0% previously. Annual expectations rose to 4.5% from 4.2% and 4.4% expected.
  • Jobless claims came in well below expectations at 209,000 vs. 227,500 expected and 231,000 previously.
  • Stronger macro data from the US economy supported the dollar today. EURUSD is losing 0.28% and is trading at 1.088, while the dollar index contract is trading 0.38% higher.
  • Gas inventories according to the EIA came in well below forecasts and showed a drop of 7 billion bcf vs. 3 billion bcf expected increase and 60 billion bcf previously.
  • Oil erased much of today's declines, but both Brent and WTI remain down more than 1% on the day. Traders are valuing the likely absence of further OPEC+ production cuts, with Andurand Capital expecting that Saudi Arabia could even increase it if it fails to gain support for deeper cuts among OPEC+ members. A meeting of OPEC+ countries tentatively scheduled for this weekend has been postponed until November 30.
  • The EIA's report on U.S. oil inventories turned bearish and largely confirmed yesterday's bearish reading on API crude inventories.
    • Crude oil inventories: +8.7 mb vs +0.9 mb expected (API: +9.05 mb)
    • Gasoline stocks: +0.75 mb vs -0.1 mb expected (API: -1.79 mb)
    • Distillate stocks: -1.02 mb vs -1.29 mb expected (API: -3.51 mb)
  • Due to the stronger dollar, we could see a pullback in the precious metals market. Gold returned dynamically below the $2,000 barrier and is currently trading just below the $1,990 level. 
  • Cryptocurrencies are trading in positive sentiment. Ethereum is gaining nearly 5% and is trading above $2050, although Bitcoin itself remains relatively muted at $36,800. Altcoins Graph and Uniswap record double-digit gains
  • Tomorrow is the Thanksgiving holiday in the US, so some markets will be closed. 
An inverse head and shoulders formation may be forming on OIL WTI. Source: xStation5

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