Oil prices firm on optimism over declining stocks - Sean Seshadri

Oil prices firmed on Wednesday to hold near eight-week highs hit in the previous session, on expectations of a drawdown in U.S. stocks and as a rise in shale oil production shows signs of slowing.

Brent crude futures had risen 36 cents, or 0.7 percent, to $50.56 a barrel by 0332 GMT, after rallying more than 3 percent on Tuesday.

U.S. West Texas Intermediate futures climbed 46 cents, or 1 percent, to $48.35 a barrel.

U.S. crude stocks fell sharply last week as refineries boosted output, while gasoline inventories increased and distillate stocks decreased, data from industry group the American Petroleum Institute showed on Tuesday.

Crude inventories declined by 10.2 million barrels in the week ending July 21 to 487 million, compared with expectations for a decrease of 2.6 million barrels.

The market has been buoyed by Saudi Arabia's announcement at a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers on Monday that it would limit crude exports to 6.6 million barrels per day (bpd) in August, down nearly 1 million bpd from a year earlier.

"This has seen expectations of further drawdown in inventories increase," ANZ said in a research note, referring to the Saudi plans.

Nigeria also agreed to join a push to rein in production by capping or cutting its output from 1.8 million bpd once it stabilizes at that level.

However, the current uptrend in oil prices could be limited to the low $50 per barrel region, according to Ric Spooner, chief market analyst at CMC Markets in Sydney.

"As we approach $50 and into the low $50s, that's a level that could attract increased U.S. shale oil production if it stays around that level," he said.

On Monday, Anadarko Petroleum Corp (NYSE:APC) said it would cut its 2017 capital budget by $300 million because of depressed oil prices, the first major U.S. oil producer to do so, after posting a larger-than-expected quarterly loss.

Oil prices have come under pressure from an oversupply of crude around the globe, brought on in part by rising production from U.S. shale regions.

Indonesia's energy minister said on Tuesday that Southeast Asia's top crude producer would be open to rejoining the Organization of the Petroleum Exporting Countries (OPEC) as long as it is not forced to curb its own crude oil production.

Australia stocks higher at close of trade; S&P/ASX 200 up 0.87% - Sean Seshadri

Australia stocks were higher after the close on Wednesday, as gains in the Energy, Resources and Metals & Mining sectors led shares higher.

At the close in Sydney, the S&P/ASX 200 gained 0.87%.

The best performers of the session on the S&P/ASX 200 were OZ Minerals Ltd (AX:OZL), which rose 10.79% or 0.795 points to trade at 8.165 at the close. Meanwhile, Seven Group Holdings Ltd (AX:SVW) added 10.77% or 1.110 points to end at 11.420 and Sigma Pharmaceuticals Ltd (AX:SIG) was up 9.30% or 0.080 points to 0.940 in late trade.

The worst performers of the session were Domino'S Pizza Enterprises Ltd (AX:DMP), which fell 4.66% or 2.700 points to trade at 55.300 at the close. Independence Group NL (AX:IGO) declined 3.34% or 0.110 points to end at 3.180 and Aristocrat Leisure Ltd (AX:ALL) was down 3.11% or 0.650 points to 20.260.

Rising stocks outnumbered declining ones on the Sydney Stock Exchange by 656 to 489 and 352 ended unchanged.

The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was down 2.86% to 12.414.

Gold Futures for August delivery was down 0.50% or 6.21 to $1245.89 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in September rose 0.98% or 0.47 to hit $48.36 a barrel, while the September Brent oil contract rose 0.78% or 0.39 to trade at $50.59 a barrel.

AUD/USD was down 0.58% to 0.7890, while AUD/JPY fell 0.59% to 88.29.

The US Dollar Index Futures was up 0.05% at 93.97.

Sean Seshadri - Gold holds near 1-month high ahead of Fed meeting

Gold prices held near their highest level in around a month in European trade on Tuesday, as market players looked ahead to a Federal Reserve policy meeting for any new insight on the timing of the next U.S. rate hike and clues on how the central bank plans to pare back its balance sheet.

Comex gold futures were at $1,256.73 a troy ounce by 3:15AM ET (0715GMT), up $2.60, or about 0.2%. It touched its highest since June 26 at $1,259.00 in the prior session.

Gold prices finished a few cents lower on Monday, ending a six-session win streak.

The Fed is not expected to take action on interest rates at the conclusion of its two-day policy meeting on Wednesday, keeping it in a range between 1.0%-1.25%.

The central bank will release its post-meeting statement as investors look for any change in language which could point more clearly to a rate hike in the months ahead.

Market players will also pay close attention to details of when and how the Fed will start reducing its $4.5 trillion balance sheet.

According to Investing.com’s Fed Rate Monitor Tool, conviction for another rate hike before the end of the year has faded, with just 35% of market players expecting another move by December, as the subdued inflation outlook raised doubts over whether policymakers will be able to stick to their planned tightening path.

The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

Focus will also be on headlines coming out of Washington, where the Senate is expected to continue working to repeal Obamacare. The investigation into U.S. President Donald Trump campaign's ties to Russia will continue to get attention.

Gold has been well-supported in recent sessions as ongoing political turmoil in the White House and weakness in the U.S. dollar spurred haven demand for the precious metal.

Elsewhere on the Comex, silver futures inched up 4.0 cents, or roughly 0.2%, to $16.48 a troy ounce, after hitting a three-week high of $16.57 a day earlier.

Among other precious metals, platinum was up 0.6% at $937.65, while palladium added 0.6% to $854.15 an ounce.

Sean Seshadri - Oil rises for second day in a row on OPEC support pledges

Oil prices continued higher in European trade on Tuesday, extending gains into a second session after OPEC producers pledged further support measures to help speed the rebalancing of global supply and demand.

The U.S. West Texas Intermediate crude September contract was at $46.62 a barrel by 3:40AM ET (0740GMT), up 28 cents, or around 0.6%.

Elsewhere, Brent oil for September delivery on the ICE Futures Exchange in London tacked on 26 cents to $48.87 a barrel.

Oil prices finished higher on Monday after Saudi Arabia pledged to make deep cuts to its crude exports in August.

Saudi Arabia, OPEC’s largest producer, will limit exports to 6.6 million barrels a day in August, energy minister Khalid Al-Falih said after a meeting with fellow crude producers on Monday.

Meanwhile, Nigeria, which has been exempt from this year’s OPEC-led production-cut deal, pledged to take part in cuts once it reaches a production level of 1.8 million barrels a day. The cartel’s latest data put the country’s output at around 1.7 million.

In May, OPEC and some non-OPEC producers, such as Russia, extended an agreement to slash 1.8 million barrels per day in supply until March 2018.

So far, the agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, as well as a relentless increase in U.S. shale production.

Investors now looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.

Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT) later on Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 3.0 million barrels.

Elsewhere on Nymex, gasoline futures for August was little changed at $1.559 a gallon, while August heating oil added half a cent to $1.522 a gallon.

Natural gas futures for September delivery ticked up 2.0 cents to $2.902 per million British thermal units.

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