The Wall Street Journal reported this morning that the U.K. vote against military strikes in Syria is a tough blow to Prime Minister David Cameron's
Mr. Cameron said it is clear that the British Parliament, reflecting the view of the British people, doesn’t want to see the U.K. get involved in military action and “the government will act accordingly.”
Crude prices fell on Thursday after UK lawmakers voted against military action over Syria, easing supply concerns from Middle East. Also, US Defense Secretary said that the U.S. won’t act without allies which further pushed prices down. The IEA said that oil markets were well supplied and no action was currently needed, however it stands ready to respond if there’s a major supply disruption. Saudi Arabia’s oil production is expected to rise by 1 million bpd to 10.5 bpd in the third quarter, which would be the highest quarterly production.
The minute the vote was announced crude oil began to tumble easing to trade at 1.0763 down by $1.17, Brent oil followed the cues to trade at 114.34 this morning. Holiday lightened trading should leave the commodity within this range for the next few days. Yesterday’s US GDP surprise helped limit the decline after GDP printed well above expectations. US Prelim Gross Domestic Product (GDP) rose by 2.5 percent in Q2 of 2013 as against a rise of 1.7 percent in Q1 of 2013. Unemployment Claims declined by 6,000 to 331,000 for week ending on 23 rise of 337,000 in prior week. Prelim GDP Price Index gained by 0.8 percent in second quarter of 2013 with respect to 0.7 percent in first quarter of 2013. The US Dollar Index (DX) gained around 0.7 percent in yesterday’s trading session on the back of more than expected rise in the US GDP data which led to concerns of QE tapering from the Federal Reserve.
Japan’s Manufacturing Purchasing Managers’ Index (PMI) rose by 1.5 points to 52.2-mark in August as against a rise of 50.7 also limiting declines.
Natural gas continued to climb this morning to trade at 3.637 up 19 pips as temperatures across the US turned higher than previous forecast. Natural gas prices ended higher on back of warm weather which increased the cooling demand. Prices are expected to move in range as higher inventories which came at 67B and milder weather forecast next week can keep prices in check.