Analysts and traders are not expecting any recovery of crude supplies from Nigeria in the short-term, as the attacks are increasing and the whole country is in a condition of war.
Stocks and commodities further extended their gains after US Federal Reserve Chair Janet Yellen’s comments portrayed an expectation of slow interest increases for this year regardless of the unsatisfactory US job data for May. Stable interest rates always have a positive impact on commodity prices, as any growth in the US dollar makes it costly to buy commodities for those who hold other currencies.
Crude oil prices have also experienced support, this time from expectations of another drop in US crude stockpiles. Based on information from the market intelligence firm, Genscape, crude oil inventories have declined by nearly 1 million barrels at the Cushing, Oklahoma delivery point.
On the back of several pieces of optimistic news, Brent crude settled 1.5% higher at $50.39 a barrel, after touching $50.83 a barrel in midday trading, its highest level in the last seven months. US crude grew 2.2% to $49.69 a barrel at the end of the latest session.
The rally in oil prices and Yellen’s comments have also given huge support to the overall business environment and related indices. The Dow Jones Industrial Average increased by 0.6% to 17,920.33 points, while The S&P 500 grew by 0.5% to 2,109.41. Energy, mining and financial services stocks experienced the largest gains.
The market was already receiving strong support from the falling US, Venezuelan, and Libyan supply, but the latest disruptions in Nigerian production could further optimize traders’ sentiments.
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