Chai Shai Chaishai with me

Oil prices are 20% higher, and energy equities are gaining ground.

After being written off earlier this year, energy equities are staging a return.

The energy subsector of the S&P 500 index has risen more than 6% so far this quarter, outpacing the overall index.

Investors were expecting the surge in energy equities from 2017 to accelerate this year due to a shortage of global supply, but the sector has struggled so far this year.

Even though OPEC+ (the Organization of the Petroleum Exporting Countries plus Russia) producers announced several supply cutbacks to boost crude prices, energy stocks still fell.

However, energy supplies have shown signs of improvement in recent months. The one million barrels-per-day cut that Saudi Arabia instituted in July was extended until September on Thursday. These changes amount to the largest drop in productivity in the country in recent memory.

That has contributed to the rise in crude prices, which are now over $80 per barrel after falling below $70 early in the year. Since June 11, the price of US WTI crude oil is up 22%, while the price of Brent crude oil, used as a global benchmark, is up 19%.

Due to increased travel this summer, demand for petroleum has increased in tandem with production cuts. The economic outlook is improving, and investors are hopeful that the Federal Reserve will stop rising interest rates soon, so energy equities are looking better than they have all year.

A senior energy trader at CIBC Private Wealth named Rebecca Babin stated that “you kind of needed all of those things to happen at the same time.”

Earnings reports from oil giants in the most recent quarter were all over the place. More crucially, the corporations provided forward-looking guidance that has, on balance, encouraged investors.

As a probable indicator of confidence in its future financial performance, Chevron stated in its post-earnings conference call on July 28 that it intends “to deliver strong free cash flow for years to come” and resume share buybacks into the fourth quarter. Both Shell and BP raised their quarterly dividend payments recently.

According to Reuters, OPEC+ is certain to maintain its current oil policy at a meeting this Friday. Babin predicts, though, that the OPEC will remain attentive in its efforts to maintain oil prices high. As China takes steps to stimulate its economy, demand is projected to rise, which might provide additional support for oil prices, despite the fact that a slowing economy could put downward pressure on pricing.

Co-chief investment officer at StrategicPoint Derek Amey said that oil prices might return to $100 per barrel if they continue to rise.

The employment report should be robust.

My colleague Alicia Wallace tells me that the markets and analysts are anticipating another strong jobs report on Friday.

In recent months, the monthly jobs report has provided plenty of drama and more than its share of surprises.

For instance, in July of last year, the US economy added 568,000 jobs, which was significantly higher than the 250,000 jobs predicted by experts.

The government’s jobs report for July may not be as shocking as many expect it to be on Friday. In all likelihood, it will be somewhat routine, with employment growth slowing slightly and unemployment remaining about the same.

According to Glassdoor’s chief economist, Daniel Zhao, our forecasts are somewhat predictable, which is a positive thing. Even if “unexpected shocks” are always a possibility, “right now, we’re on a good glide.”

Analysts surveyed by Refinitiv agree with Zhao’s forecast that US companies created 200,000 new jobs in July and that the unemployment rate remained unchanged at 3.6% from June.

Recent rice restrictions in India caused widespread hysteria. Here is the current situation

The Indian government made a sudden decision last month to prohibit the export of non-basmati white rice, which includes many types that are popular in South Indian regions.

My colleague Danielle Wiener-Bronner says that some U.S. customers have resorted to panic buying over concerns that the move will disrupt rice supply in some regions of the world.

But those who cultivate rice in the United States want shoppers to know: We have plenty of rice.

The USA Rice Federation, which represents the interests of the American rice business abroad, declared on Monday that “there is enough U. rice to go around.” You can’t use this as toilet paper in the year 2020 spring.

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button