Crude Oil Weaker After Hurricane Impact Downplayed, Aussie Rises on Strong GDP GrowthAustralia’s economic growth jumped to 3.4 percent in the June quarter. U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading slightly lower early Wednesday after yesterday’s roller-coaster ride that drove prices to their highest levels of the year.
Asia stock markets are trading lower early Wednesday, following the lead set by Wall Street on Tuesday. The catalysts behind the selling pressure are worries over a trade dispute escalation and another sell-off in emerging markets.
At 0316 GMT, Japan’s NIKKEI 225 Index is trading 22631.17, down 65.73 or -0.29%. Australia’s S&P/ASX 200 Index is at 6240.30, down 52.80 or -0.84%. China’s Shanghai Index is trading 2733.94, down 16.64 or -0.60%.
Late Tuesday, Australia’s top central banker played down recent increases in mortgage rates by domestic lenders but highlighted global risks to growth including a possible escalation of trade disputes and economic strains in emerging markets.
Governor Philip Lowe said in a speech in Perth that the Reserve Bank of Australia (RBA) was also watching out for a material lift in U.S. inflation which could force the Federal Reserve to tighten policy at a faster pace.
Lowe also signaled the next move was going to be an increase, albeit not for some time.
At 0327 GMT, the AUD/USD is trading a little better at .7195, up 0.0018 or +0.25% after Australia’s economic growth jumped to 3.4 percent in the June quarter.
The figure was up from the 3.1 percent year-on-year GDP growth in the March quarter and above the 3 percent the Reserve Bank of Australia had forecast.
It is also the fastest annual rate of growth since September 2012 during the height of the past-GFC mining boom.
In seasonally adjusted terms, the economy grew by a stronger-than-expected 0.9 percent over the quarter, which was only marginally down on the strong and upwardly revised 1.1 percent growth in the first three months of the year.
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading slightly lower early Wednesday after yesterday’s roller-coaster ride that drove prices to their highest levels of the year.
Oil prices jumped early Tuesday as traders took precautions ahead of potential supply disruptions due to a hurricane forecast for the upper U.S. Gulf Coast. According to reports two Gulf of Mexico oil platforms were evacuated in preparation for Tropical Storm Gordon. The storm was expected to become a hurricane before it makes landfall as a Category 1 hurricane near the Mississippi-Alabama border.
Prices moved lower later in the session due to technically overbought conditions. Some analysts also said that speculative buyers were way ahead of the actual event and that the direction of the storm is still unknown as well as what infrastructure, if any, will be impacted.
Also putting pressure on crude oil was a report from Genscape that said Cushing, Oklahoma, crude inventories rose nearly 754,000 barrels from August 24 to August 31.