The Energy Report
Crude oil price extends further gain and rallies +2% to 71.7 in European morning. After Fed's comments, strong GDP data from the Eurozone fueled optimism for economic growth and improved oil demand.
In 2Q09, GDP in the 16-nation region Eurozone contracted -0.1% QOQ, better than market expectation of -0.5%, following a -2.5% decline in the prior quarter. The reading indicated the pace of contraction has slowed down. Except for Netherlands, all major economies showed pleasant surprises with Germany and France turning into growth again on annualized rate.
Stock markets surge after the report. Germany's DAX index rises +1.3% to 5421 while France's CAC index adds almost +1%. In UK, the FTSE 100 index climbs to 10-month high after Prudential's earnings results beat estimates.
In Asia, stock advanced after the Fed signaled recession is ending. The MSCI Asia Pacific Index rose +1.6%. Hong Kong's Hang Seng Index added more than +2% as the blue chip Hutchison Whampoa and Cheung Kong reported better-than-expected earnings results.
High-yield currencies fight back for the second day as economic outlook gets stronger. The Euro rises to 1.426 while the pound soars to 1.66 against USD. Investors who had parked capitals in USD-denominated asset for safe-haven investment or speculations that the Fed would increase interest rate sooner than previous forecast probably changed strategies.
In the post-meeting statement, the Fed's view on inflation was the same in previous meetings. 'The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.'
While hovering at high level year-to-date, TIPS breakeven rate suggested that anticipation for inflation has moderated. We believe this is the outcome after governments across the globe reiterated low inflationary risk despite massive stimulus strategies.
Notable Quotes
"Uranium producers like EFR are going to start popping up on people's radar screens." (5/23/13) Energy Fuels Inc. - The Energy Report Interview with Matt Badiali More >
"The conservative uranium bet is to go with companies making money at current prices. That's FCU." (5/23/13) Fission Uranium Corp. - The Energy Report Interview with Matt Badiali More >
"CHK is active in the Marcellus sweet spot in northwestern West Virginia." (5/16/13) Chesapeake Energy Corp. - The Energy Report Interview with Josh Young More >
"FCU is on to the most exciting uranium discovery to come around in quite a while." (5/14/13) Fission Uranium Corp. - The Metals Report Interview with Brent Cook More >
"Majors like RDS are moving toward gas." (5/9/13) Royal Dutch Shell Plc - The Energy Report Interview with Keith Schaefer More >
Strong GDP Data in Europe Lift Oil Price Further
Source: Oil N' Gold (8/13/09)
"After Fed's comments, strong GDP data from the Eurozone fueled optimism for economic growth and improved oil demand."
More Experts
"ARW's new reserve estimate on West Hazel is a really good number." (4/30/13) Aroway Energy Inc. - The Energy Report Interview with Bob Moriarty More >
"TCF has already found 1 Tcf gas and is raising money to drill." (4/30/13) CBM Asia Development Corp. - The Energy Report Interview with Bob Moriarty More >
"I think everyone is expecting BSP's share value to grow." (4/25/13) Big Sky Petroleum Corp. - The Energy Report Interview with Jim Letourneau More >
"Things seem to be going well on the development front for MMT." (3/28/13) Mart Resources Inc. - The Energy Report Interview with Amin Haque More >
"FIS has the right management team that made not one, but two major discoveries." (3/21/13) Fission Energy Corp. - The Energy Report Interview with Marin Katusa More >