Oil rises for a third day amid escalating Middle East tensions

US crude inventories rose unexpectedly last week to their highest since September 2017, the Energy Information Administration said. (AP)
Updated 16 May 2019
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Oil rises for a third day amid escalating Middle East tensions

  • Analysts say oil was drawing support from heightened tensions in the Middle East
  • Supply losses from OPEC members Iran and Venezuela have deepened the impact of the OPEC-led production restrictions

TOKYO: Oil prices rose on Thursday for a third straight session, as the risk of conflict in the Middle East stoked fears of supply disruptions, negating an unexpected rise in US inventories.
Brent crude futures were at $72.16 a barrel at 0349 GMT, up 39 cents, or 0.5 percent, from their last close. Brent closed up 0.7 percent on Wednesday.
US West Texas Intermediate (WTI) crude futures were at $62.41 per barrel, up 39 cents, or 0.6 percent, from their previous settlement. WTI closed up 0.4 percent in the last session.
Analysts said oil was drawing support from heightened tensions in the Middle East, with helicopters carrying US staff from the American embassy in Baghdad on Wednesday out of apparent concern about perceived threats from Iran.
While the gain in US inventories overnight is helping to cap prices, so too is uncertainty about whether OPEC and other producers will maintain into the second half of the year supply cuts that have boosted prices more than 30 percent so far in 2019.
The Organization of the Petroleum Exporting Countries (OPEC) said on Tuesday that world demand for its oil would be higher than expected this year.
“Though supply-side disruptions remain supportive of oil prices, OPEC has yet to release indicative statements on supply plans,” Benjamin Lu, commodities analyst at Phillip Futures in Singapore, told Reuters by email.
Supply losses from OPEC members Iran and Venezuela, now under US sanctions, have deepened the impact of the OPEC-led production restrictions.
The so-called OPEC+ group of producers, which includes Russia, meets next month to review whether to maintain the pact beyond June.
US crude inventories rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, the Energy Information Administration (EIA) said.
Crude stocks swelled by 5.4 million barrels, surprising analysts who had expected a decrease of 800,000 barrels for the week ended on May 10.


UK core pay growth strongest in nearly 11 years, but jobs growth slows

Data showed the unemployment rate remained at 3.8 percent as expected. (Shutterstock)
Updated 16 July 2019
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UK core pay growth strongest in nearly 11 years, but jobs growth slows

  • Core earnings have increased by 3.6 percent annually, beating the median forecast of 3.5 percent
  • The unemployment rate fell by 51,000 to just under 1.3 million

LONDON: British wages, excluding bonuses, rose at their fastest pace in more than a decade in the three months to May, official data showed, but there were some signs that the labor market might be weakening. Core earnings rose by an annual 3.6 percent, beating the median forecast of 3.5 percent in a Reuters poll of economists. Including bonuses, pay growth also picked up to 3.4 percent from 3.2 percent, stronger than the 3.1 percent forecast in the poll. Britain’s labor market has been a silver lining for the economy since the Brexit vote in June 2016, something many economists attribute to employers preferring to hire workers that they can later lay off over making longer-term commitments to investment. The pick-up in pay has been noted by the Bank of England which says it might need to raise interest rates in response, assuming Britain can avoid a no-deal Brexit. Tuesday’s data showed the unemployment rate remained at 3.8 percent as expected, its joint-lowest since the three months to January 1975. The number of people out of work fell by 51,000 to just under 1.3 million. But the growth in employment slowed to 28,000, the weakest increase since the three months to August last year and vacancies fell to their lowest level in more than a year. Some recent surveys of companies have suggested employers are turning more cautious about hiring as Britain approaches its new Brexit deadline of Oct. 31. Both the contenders to be prime minister say they would leave the EU without a transition deal if necessary. A survey published last week showed that companies were more worried about Brexit than at any time since the decision to leave the European Union and they planned to reduce investment and hiring. “The labor market continues to be strong,” ONS statistician Matt Hughes said. “Regular pay is growing at its fastest rate for nearly 11 years in cash terms and its quickest for over three years after taking account of inflation.” The BoE said in May it expected wage growth of 3 percent at the end of this year.