China Real Estate Stimulus Boosts Stock Prices; Hurricane Helene Spares Gulf of Mexico Oil Infrastructure
Recent reports of China’s largest real estate stimulus package since the COVID shutdown have caused a surge in stock prices. China is reducing the reserve requirement ratio for banks by 50 basis points and hints at further cuts in the future. Additionally, the 7-day repo rate has been lowered by 0.2 percentage points, with a potential 0.2-0.25% cut in the loan prime rate to follow.
In other news, Hurricane Helene seems to have spared most of the Gulf of Mexico oil infrastructure, despite Chevron and Shell removing non-essential personnel from platforms as a precaution.
Oil prices saw a slight dip following remarks from Iranian President Masoud Pezeshkian about de-escalating tensions with Israel. However, the situation remains tense, with Israel’s aggressive tactics keeping Iran and its allies on edge.
Amidst all this, the United States is expected to see a drawdown in oil inventories, particularly in areas like . The aftermath of Hurricane Francine is likely to impact this week’s inventories, with crude supply expected to decrease by 2 million barrels. Gasoline and distillate inventories are also expected to see a 2 million barrel drawdown.
Furthermore, the energy market is experiencing a breakout, driven by supply reductions from Hurricane Francine and concerns over pipeline issues. Prices are on the rise, with some basins seeing prices below production costs. The futures chart suggests a potential major move to the upside.
The EIA’s report on publicly traded U.S. oil exploration and production companies indicates a decrease in cash from operations due to lower natural gas prices. Despite a 2% decline in West Texas Intermediate crude oil prices, production by these companies increased by 5% to nearly 4.2 million barrels per day.
Overall, the energy market is experiencing fluctuations driven by global events and market dynamics. Investors and consumers should stay informed and monitor developments to make informed decisions about their finances and investments.