Oil stops at current levels

Oil stops at current levels

23 June 2017, 10:34
Andrey Egorov

On Thursday, the stock indices were trading with low volatility without a single direction and have closed mixed. The Dow Jones slipped 0.06% (21397.29), S&P 500 fell by 0.05% (2434.50), and the NASDAQ slightly gained 0.04% (6236.69). European markets have not shown uniform dynamics also. The German DAX gained 0.15% (12794.00), British FTSE 100 dropped by 0.11% (7439.29).

 In Europe, despite the different directions of indices, increase of volatility was not observed. From the macroeconomic data it can be highlighted the index of consumer confidence that continued growth in June, it is now equals to -1,3 points. This level was observed last time 10 years ago that talks about the continued improvement in the region.

 EU summit is continuing, once arrival there Chancellor of Germany Angela Merkel said that negotiations on Brexit will be carried out intensively and rapidly, but she also expressed their intention to further cooperation with the UK. The summit will finish today.

 Yesterday's statistics from the US labor market have made bad background for buyers. The number of primary and repeated applications for unemployment benefits increased more than expected, while the previous figure was revised not for the better. The index of wide market S&P 500 after strong gains in the beginning of session left to the correction at the end and closed a little worse than the previous day. Similar dynamics is observed in the US dollar, which gone down during the morning Asian session.

 Now Among the favorites on the American stocks is the sector of pharmaceuticals. The publication news about the bill in healthcare was driver growth for them. It was prepared by the Republican Party. Most likely, it will be presented to the Senate for a vote next week. Capitalization Johnson & Johnson increased by 1.03%, UnitedHealth grew by 1.49%, Gilead Sciences jumped by 5.24%. Recovery continues in the high-tech sector, which now looks better than the market. Among of them it stood out Oracle, capitalization of which gone up for 8.9% after the publication of financial results much better than expected.

 Oil prices have stopped their decline, and attempt of a correction was yesterday. The result is the first day this week closed positively. As expected, the support at the level of 42,5 USD per barrel for WTI was strong enough and has survived yet. Good effect was brought with the press release of the recent OPEC meeting, which reported on the implementation of the Vienna agreement to reduce offer by 106%. Now we can talk about stay of oil prices in the oversold area. Black gold is now undervalued against the background of decrease in the dollar index which fall by 5% since the beginning of the year. There is a possibility of development of more large-scale correction in the near future. The EIA forecasts for the third quarter say that demand will exceed production, and as a result the expected reduction in global inventories and as consequent it can lead to the growth of prices for hydrocarbons.


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