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April 19, 2016

Kuwait Strike props up Oil market, Iran tries hard to catch up with other oil producers.

Kuwait Strike props up Oil market, Iran tries hard to catch up with other oil producers.

Iran could reach pre-sanctions production levels within two months, said the country’s deputy minister of oil on Tuesday, confirming Tehran’s intention to ramp up production.

Iranian IRNA reported citing Deputy Oil Rokneddin Javad, Iran will be able to enter the pre-sanctions production levels by the end of the Iranian month of Khordad, or by June 20.Iran has refused to freeze production at January levels, which OPEC estimated at 2.93 million barrels per day, and wants to return to the level of 4 million barrels per day. According to the words of Javad last week production exceeded 3.5 million barrels per day.

Oil production in Kuwait  dropped to 1.5 million barrels per day, despite the indefinite strike of trade unions, said a spokesman of the industry to KUNA newspaper  on Tuesday.Thousands of workers of oil and gas industry of Kuwait went on strike on Sunday to protest against the planned reforms related to salaries in the public sector.The strike lasted for three days, and the trade unions did not report the timing of its completion.On the first day of the strike, oil production in Kuwait dropped to 1.1 million barrels per day from 2.8 million barrels per day in March.The strike in Kuwait raised world oil prices, sagging after unsuccessful negotiations black gold producers about production freeze.

Japanese yen tumbles on Tuesday while commodity currencies are rising due to the recovery in oil prices after the sharp fall in the previous session, stimulating the growth of investor sentiment.

Pair USD / JPY rose 0.49% to 109.33 with a one-week low on Monday 107.82.

On Tuesday, oil prices are seeing an increase as oil strike in Kuwait has reduced the level of production in the country by 60%, overlapping market frustration over unsuccessful negotiations between the major exporters to freeze production to support prices.Recovery in oil prices has strongly contributed to the growth of equity markets, resulting in a jump of European indices to three-month highs.

The fears of Japanese intervention to weaken the yen, force investors to remain cautious on increasing bullish pressure on Japanese currency.Japanese Finance Minister Taro Aso said on Tuesday that he will take “various measures” against  further Yen strengthening and added that the sharp fluctuations in exchange rates are undesirable.

The US dollar fell in tandem with the Canadian dollar to a minimum 1.2740, its lowest level since July, and the pair is now trading at 1.2762.The Australian dollar peaked at 0.7803 and is now trading at 0.7777, up 0.37% today, while the pair NZD / USD grew by 0.91% to 0.7011.Euro shows an increase against the dollar, the EUR / USD strengthened by 0.24% to 1.1338.The euro was also up against the yen, with EUR / JPY rose 0.71% to 123.97.

The single currency found support after data showed the continued growth of economic sentiment in Germany this month.ZEW index of economic sentiment in Germany rose to 11.2 in April from 4.3 in March, beating the forecast of 8.0.USD Index, which tracks the greenback against a trade-weighted basket of six major rivals, was down 0.13% to 94.33.Prospects for an early rise in US interest rates remains uncertain after the Federal Reserve Bank of Boston President Eric Rosengren warned on Monday that rates may be raised sooner than investors expect that at the moment.Low interest rates make the dollar less attractive to investors looking for profit.

Meanwhile, the president of the Federal Reserve Bank of New York William Dudley warned that the US central bank is likely to stick to a cautious approach to tightening monetary policy.

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