Friday, November 22, 2024

FTSE 100 up and US indices set for fresh highs as traders look to inflation data

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Yahoo Finance UK’s Pedro Goncalves writes:

Oil prices stabilised after experiencing their sharpest drop in nearly two weeks, as continued worries over China’s economic recovery weighed on the market.

Brent crude futures gained 0.2%, trading at $74.02 per barrel, while US West Texas Intermediate (WTI) (CL=F) climbed 0.1% to $70.45 per barrel at the time of writing.

Data at the weekend showed anaemic Chinese consumer inflation in October, while factory-gate prices fell again. That came after Beijing unveiled a debt-swap plan on Friday to bolster the economy, but stopped short of unleashing new stimulus, disappointing investors.

Crude markets are assessing prospects for demand in 2025, with analysts also eyeing potential impacts of Trump’s White House return and Middle Eastern geopolitical tensions. With a global surplus anticipated next year, investors will be closely watching for influential projections on energy demand, beginning with OPEC’s outlook set to release Tuesday.

In the physical oil market, timespreads have shown signs of softening. Brent’s prompt spread — a measure of the price difference between its two nearest contracts — remains in backwardation but has narrowed to 27 cents from 44 cents a month ago.

Following the OPEC report, the US Energy Information Administration will present its short-term forecast on Wednesday, followed by the International Energy Agency’s perspective on Thursday. In its last update, OPEC lowered its demand projections, adding further caution to the market’s outlook.

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