Monday, November 21, 2016

Markets rise, led by higher prices for oil

Dow added 30, advancers over decliners better than 2-1 & NAZ went up 16.  the MLP index inched higher in the 302s & the REIT index rose 1 to the 323s.  Junk bond funds were a little higher & Treasuries rose.  Oil shot up to the 47s & gold was up a tad.

AMJ (Alerian MLP Index tracking fund)

Light Sweet Crude Oil Futures,J

Gold Futures,Dec-2016

3 Stocks You Should Own Right Now - Click Here!

Oil extended gains as Iran signaled optimism that OPEC will agree to a supply-cut deal & Iraq said it will offer new proposals to help bolster the group's unity before members meet next week.. Prices rose almost 3%, adding to last week’s 5.3% gain.  Iranian Oil Minister Bijan Namdar Zanganeh said it’s “highly probable” OPEC will reach a consensus & Iraq will make proposals to help reach an agreement (according to a leaker)..

Oil has rebounded from an 8-week low on Nov 14 as members of OPEC make renewed efforts before the Nov 30 meeting to finalize the supply deal they agreed to informally in Sep.  The plan to trim output for the first time in 8 years is complicated by Iran's commitment to boost production & Iraq's request for an exemption to help fund its war with Islamist militants.  West Texas Intermediate for Dec, which expires today, $1.27 to $46.96 a barrel.  The more-active Jan contract advanced $1.34 (2.9), to $47.70 a barrel.  It’s likely that OPEC producers will honor the output-cut agreement & try to put it into action, Iran's Zanganeh said after the meeting on Sat.. Iraq's “legitimate demands” shouldn’t be considered an obstacle to reaching a deal to freeze production, was reported.

Oil Rises as Iran, Iraq Signal Hope of Deal Before OPEC Meeting

The Bank of England may boost the amount covered by the UK's bank deposit guarantee after the vote to leave the EU caused the £ to plunge.  The BOE’s Prudential Regulation Authority proposed to restore the limit to £85K ($105K) from £75K, the level set in Jul 2015.  EU law required non-euro member states to adjust their deposit guarantees at that time to the equivalent of €100K, the PRA said.  “Taking into consideration the developments in financial markets” following the June 23 Brexit vote, including with respect to the £-€ exchange rate, the PRA “considers that a structural shift in the exchange rate has occurred,” the regulator added.  “These events were unforeseen when the U.K. limit was reduced in 2015.”  The £ has fallen about 11% against the € since the referendum amid concern about the potential economic impact of lost access to the EU's single market.

British pound since Brexit vote
British pound since Brexit vote
The proposal “is intended to provide a measure of memorability and consistency,” the PRA said.  The regulator will “continue to monitor fluctuations in the exchange rate but, barring unforeseen events, will seek to avoid making further adjustments to the deposit protection limit.”

Brexit Impact Prompts BOE Plan to Increase Deposit Guarantee

The average price of regular grade gasoline has fallen nationally to $2.20 per gallon, a drop of 6¢ over the past 2 weeks.  An industry predicting that prices would continue inching down unless a meeting of oil-producing nations later this month culminates in "a credible agreement to freeze or reduce" production.  A seasonal weakness in demand was one reason behind the early-Nov decline.  With autumn maintenance projects wrapping up, US refiners are increasing supplies.  Those factors combined to create the drop in average prices, despite a small rise in crude oil prices.

Gas Prices Dip to Average of $2.20 Per Gallon

In this semi-holiday week, oil is rising on excitement that producing countries can agree on production limits.  Based on OPEC's track record of getting its countries to agree on anything, that is not a good bet.  Price swings in stocks don't mean a lot this week.

Dow Jones Industrials


No comments: