Oil prices fall on firmer US dollar
Oil prices fall on firmer US dollar
US West Texas Intermediate (WTI) crude futures were at $61.15 a barrel at 0640 GMT, down 53 cents, or 0.9 percent, from their last settlement.
Brent crude futures fell 42 cents, or 0.6 percent, from their last close to $65 per barrel.
The dollar rose to a one-week high against a basket of major currencies on Thursday, after minutes of the Federal Reserve’s January meeting showed policymakers were more confident of the need to keep raising interest rates.
“The firming dollar continues to thwart investor sentiment despite the bullish inventory data,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA.
Since oil trading is conducted in dollars, a rise in the greenback makes fuel imports for countries using other currencies domestically more expensive, potentially curbing demand.
The firm dollar outweighed a reported fall in US crude inventories.
The American Petroleum Institute on Wednesday reported an unexpected drop in US crude oil inventories by 907,000 barrels to 420.3 million barrels for the week to Feb. 16.
“Improved pipeline infrastructure to the Gulf coast and the decreased supply via TransCanada’s Keystone pipeline, sent ... inventories tumbling,” Innes said.
Despite Thursday’s falls, analysts said oil markets were generally well supported due to demand-growth coinciding with production restraint led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia.
“OPEC production curbs have stabilized the market. Adherence to (the) agreement has been relatively good,” Daniel Hynes, senior commodity strategist at ANZ bank, said in a report published on Thursday.
Glencore launches $1 billion additional share buyback
- Glencore said in July it would buy back shares worth up to $1 billion in a program of purchases running to the end of 2018
- Many mining stocks have pared gains over the past few months as metals markets weakened
LONDON: Commodities trader and miner Glencore said on Tuesday it would repurchase more of its shares worth up to $1 billion, increasing the size of an existing buyback program that followed a subpoena from US authorities.
Glencore said in July it would buy back shares worth up to $1 billion in a program of purchases running to the end of 2018. It has now extended the program to the end of February 2019.
The London-listed miner, with a market capitalization of $61 billion, announced plans to repurchase shares after the US government investigation into bribery and corruption sent the stock down more than 15 percent since the start 2018.
Companies across the mining industry have been handing money back to shareholders after a recovery from the mining and commodity crash of 2015-16 and in response to pressure from investors not to spend cash on buying assets that they say may never deliver returns.
Global miner Rio Tinto said last week it will return $3.2 billion to shareholders from its sale of Australian coal assets in addition to existing buyback programs.
Glencore’s share price had already been hit by concerns about political risk in Democratic Republic of Congo, where it mines just over a quarter of the global output of cobalt, because of a mining code that was signed into law in June.
After publishing first-half results just below analyst forecasts in August, the company, which has aggressively slashed its debt since 2015, said it would favor share buybacks over deal-making.
Many mining stocks have pared gains over the past few months as metals markets weakened in response to global trade tensions and uncertainty about Chinese demand.