Oil prices rush to two-week high as missle attacks erupt betwen Russia and Ukraine
Oil prices rallied in American trade on Thursday to two-week highs and resumed the gains after a short hiatus yesterday, as missile attacks between Russia and Ukraine spiked, threatening oil supplies from the world’s second largest crude producer.
In the US, earlier data showed crude stocks rose for the third straight week, while crude production slowed down to a two-month low.
Prices
US crude rose 1.9% to $70.34 a barrel, the highest since November 11, with a session-low at $68.89.
Brent added 1.9% to $70.34 a barrel, the highest since November 11, with a session-low at $68.89.
On Wednesday, US crude fell 0.4%, while Brent shed 0.3%, the first loss in three days.
Eastern European Conflict
Ukraine recently launched a series of British Cruise missiles on Russia on Wednesday, the newest western weapon that was allowed for use by Ukraine on Russian targets, after the launch of the American ATACMZ missiles.
Russian president Vladimir Putin approved an update to the nuclear doctrine, expanding the conditions of their use.
the US Biden administration allowed Ukraine to use American made weapons to hit deeper into Russia according to media sources.
The Kremlin warned that such a decision would directly implicate the US into the conflict, and accused the Biden administration of escalation.
US Crude Stocks
The Energy Information Administration reported a buildup of 0.5 million barrels in US crude stocks last week to a total of 430.3 million barrels, while analysts expected a drop of 0.2 million barrels.
Gasoline stocks rose 2.1 million barrels to 208.9 million barrels, while distillate stocks fell by 0.1 million barrels to 114.3 million barrels.
US Output
US crude production fell 200 thousand bpd last week according to the EIA, to a total of 13.2 million bpd, the lowest since the week ending September 13.
Bitcoin extends its record run and reaches $98,000 for first time ever
Bitcoin rallied on Thursday and extended the gains for the fourth straight session, hitting a record high above $98,000 and approaching the barrier of $100,000 on optimism about Donald Trump’s US election vows to support the crypto industry.
Bitcoin rose over 40% since Trump’s US election victory, with momentum rising further after reports that the social media company owned by Donald Trump is in talks to acquire the crypto trading company “Bakkt”, which would reinforce Trump’s alliance with the crypto system.
Otherwise, the MicroStrategy firm announced a new round of bitcoin purchases valued at nearly $5 billion, with the company’s total holdings of the cryptocurrency amounting to $29 billion.
Prices
Bitcoin rallied 4.25% at Bitstamp today to $98,367, a record high, with a session-low at $94,106.
On Wednesday, bitcoin rose 2.1%, the third profit in a row on strong investment demand on the world’s most valuable cryptocurrency.
Crypto Market Value
The market value of cryptocurrencies rose by nearly $95 billion today to a total of $3.345 trillion, a record high amid a surge in all major cryptocurrencies.
Trump
The Financial Times reported that Trump’s media and technology company, which manages the Truth Social platform, is about to acquire Bakkt through a share swapping deal.
Trump has vowed to found a supportive organizational framework for crypto assets, and a US bitcoin strategic reserve.
MicroStrategy’s Purchases
The MicroStrategy firm announced another purchase of 51,780 bitcoins valued at about $5 billion, making it the biggest crypto purchase by the company so far.
Microstrategy focuses on institutional programming, and has adopted a strategy of acquiring crypto assets, with their total bitcoin holdings reaching $29 billion so far.
The company announced plans to collect nearly $42 billion worth of bitcoin through the next three years as a method to diversify holdings and protect against inflation.
Bitcoin’s Outlook
Citibank’s analysts expected in a memo last week that bitcoin will hit $100,000 following Trump’s election victory.
They noted that cryptocurrencies are one of the few Trump deals that maintained their stellar momentum so far, due to Trump’s expected friendly attitude towards the crypto industry and its regulations.
US dollar moves in a positive zone after aggressive remarks
The US dollar rose in European trade on Thursday against a basket of major rivals, moving in a positive zone for the second straight day and approaching a year high once more following aggressive remarks from some Fed officials.
The remarks reduced the odds of another US interest rate cut in December, with investors now waiting for US unemployment claims data later today to gather more clues.
The Index
The dollar index rose 0.15% today to 106.74, with a session-low at 106.47.
On Wednesday, the index rose 0.5%, resuming gains and approaching a year high at 107.06.
Aggressive Remarks
Federal Reserve Governor Michelle Bowman said on Wednesday that progress in reducing inflation seems to have halted, and called for caution when cutting interest rates.
Boston Fed President Suzan Collins said that inflation is progressing towards the 2% target but warned that progress might be irregular, which calls for caution when taking policy decisions.
US Rates
The odds of a 0.25% US interest rate cut in December slipped from 59% to 52%.
Now investors await US unemployment claims data, expected to have risen slightly to 220 thousand last week from 217 thousand in the previous reading.