Oil prices were broadly higher on Monday as global supply seems to be falling despite the rise in U.S. production. The U.S. Energy Information Association reported on Friday that U.S. crude inventories rose for the seventh straight week, an announcement that sent oil prices steeply downward. However, the U.S. stock gain of 564,000 barrels was the lowest increase in the past several months, a trend that traders are optimistically viewing as a positive sign. If the trend of lower imports and smaller inventory gains continues we could see OPEC’s production cut having the desired impact to keep prices higher.
Compliance with OPEC’s proposed production cuts now stands around 90 percent, surprising traders and keeping oil prices stable. Brent crude rise 0.7 percent on Monday to trade at $56.39 per barrel, and WTI was trading at $54.31, a 0.6 percent increase.
Asian Stocks Erase Losses
Japan’s Nikkei fell more than 1 percent on Monday to 2 ½ week lows as the yen strengthened and financial stocks dropped in fear of U.S. President Donald Trump’s upcoming announcements about his proposed tax policy.
The dollar eased 0.2 percent against the yen on Monday sending export stocks lower and leading analysts to question whether the break of the 112 level will send the currency down towards 110, which could call into question whether Japanese companies will reach their expected growth.
For now all eyes are on Trump’s expected statements on Tuesday which will hopefully shed light on his economic policies and tax plans.