Oil Prices Climb as OPEC Considers Decline Temporary

August 8, 2016

"expectations of higher crude oil demand in the third and fourth quarters of 2016 coupled with decrease in availability".

Oil Prices Climb as OPEC Considers Decline Temporary

This article is originally referred from iForex News

Oil prices rise amid improved growth optimism as OPEC said it will hold informal talks at a conference in Algiers next months and considers the recent decline in oil prices temporary. Qatar’s energy minister, who holds OPEC’s rotating presidency, said “expectations of higher crude oil demand in the third and fourth quarters of 2016 coupled with decrease in availability, is leading the analysts to conclude that the current bear market is only temporary and oil prices would increase during the latter part of 2016”.

Bank of France sees recovery in Q3. The Bank of France reported an improvement in overall business confidence in July and said the economy is set to return to growth in the third quarter after stagnating in the second. The BdF sees economic activity expanding 0.3% in Q3, which would be slightly higher than Bloomberg consensus for a rise of 0.2% quarter over quarter. French PMI readings continue to underperform, but latest data suggest that the Brexit referendum far from denting sentiment, actually lifted confidence in the services sector. However, while this is good news indicating that at least investment projects won’t be cancelled, it remains to be seen whether any hope that Paris will be able to pick up business from London, will turn out to be justified.

Swiss CPI Continue to Rise in July

Swiss CPI rose to a cycle high of 0.2% year over year in July, up from -0.4% in June. The median forecast had been for a more modest lift to -0.3% year over year. Switzerland hasn’t seen a positive reading on headline CPI since August 2014. The sharp appreciation of the franc in January 2015 following the SNB’s abandonment of the EUR-CHF floor at 1.2000 caused a marked exacerbation in deflation, which receded in January this year. As the record level of Swiss foreign reserves attests to, the central bank has been intervening in forex markets to limit franc appreciation, which in turn has been subduing disinflationary forces.

U.S. consumer credit climbed $12.3 billion in June, a little below expectations, from a downwardly revised $17.9 billion in May. Interestingly, revolving credit paced the month’s gain, rising $7.7 billion following the $1.8 billion May gain. Non-revolving credit rose only $4.6 billion compared to the prior $16.1 surge. It’s the smallest monthly increase since August 2011.

Original Source: iForex News

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