Oil Falls To A Fresh 1-Month Low

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Oil prices fell down once again after bouncing back overnight in U.S. trading, falling to a fresh 1-month low following data showed a surprise build in U.S. crude stockpiles and the return of more Nigerian crude to an already oversupplied market.

The oil price has slipped below $50 a barrel despite a pledge by the world’s largest exporters to extend an existing output cut of 1.8 million barrels per day (bpd) into next year in an effort to cut down bulging global inventories.

The U.S. West Texas Intermediate crude July contract was at $45.45 a barrel by 8:2 AM EDT, down 24 cents, or 0.55%, after hitting its lowest since May 5 at $45.34.

Meanwhile, Brent Oil for August delivery on the ICE Futures Exchange in London plummeted 25 cents, or 0.54% to 47.81 a barrel. The global benchmark dropped to as low as $47.65 earlier in session, a level not seen since May 5.

Unexpected surge in U.S. crude stockpiles

Oil prices plunged to their lowest level in about a month on Wednesday after data showed that U.S. crude stockpiles unexpectedly climbed for the first time in nine weeks.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories increased by 3.3 million barrels in the week that ended on June 2, disappointing expectations for a crude-stock decline of 3.4 million barrels.

Gasoline inventories also increased by 3.3 million barrels. For distillate inventories including diesel, the EIA reported a rise of 4.4 million barrels.

Supply Gloom Caps Gains

Addition to concern about supply outstripping demand, Royal Dutch Shell on Wednesday lifted force majeure on exports of Nigeria’s Forcados crude, bringing all the country’s oil grades fully online for the first time in almost one and a half year.

The market has also come under pressure from news of rising output from Libya, which together with Nigeria is exempted from the production cut made by the Organization of the Petroleum Exporting Countries and its 11 partners.

“I’ve been quite bullish for the second half of this year, based on supply and demand balances and I would still not give up on that idea, that rebalancing is going to start in the second half,” said Tamas Varga, an oil strategist.

“But if Nigerian and Libyan production is picking up as well as they are now, then slowly, I am probably going to have to start changing my mind.”

Glut Concerns Weigh

Meanwhile, investors kept weighing the effect of diplomatic tensions between Qatar and other Middle Eastern nations, including Saudi Arabia, on an OPEC-led push to tighten up the market.

With oil production of about 620,000 barrels per day, Qatar’s crude production ranks as one of the smallest among OPEC producers, but tension within the cartel could deteriorate an agreement to hold back production in order to bolster prices.

Last month, OPEC and some non-OPEC producers extended a deal to cut 1.8 million barrels per day in supply until March 2018.

Concerns that the current rebound in U.S. shale production could upset efforts by other major producers to bring balance back to global oil supply and demand remained in focus.

Elsewhere On Nymex

Gasoline futures for July dropped down 0.7% to $1.491 a gallon, while July heating oil subtracted 0.2% to $1.413 a gallon. Natural gas futures for July delivery also dropped down 0.4% to $3.008 per million British thermal units, as traders anticipate the weekly storage data due later in the global day.

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Bitcoin Rallies to All-Time High, Options Exchange Increases

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Bitcoin surpassed the $2,100-level for the first time to hit a fresh new high, as a monster rally continues amid upbeat noises around the future of the cryptocurrency, and as Ledger Holdings, the New York-based parent company of bitcoin options exchange LedgerX, said it raised $11.4 million in funding on Monday.

The cryptocurrency giant surged to a daily peak of $2,105.00 on the New York-based itBit exchange at one point, its highest on record. It was last at $2,100.00 by 4:10 AM ET, up about 5% on the day. Currently, Bitcoins are trading at $2,148.58 that totally puts the market cap at $35.11 billion. The total supply of Bitcoins currently sits at 16,343,288.

At the end of April, Bitcoin was trading for about $1,300 per coin. In just three weeks, the valuation has climbed by about 50%, as Bitcoin surpassed the $2,000 mark this week. About 12% of that significant gain was in the past week alone.

Since the start of the year, the price of bitcoin has soared 116%, taking the total value of the cryptocurrency in flow to more than $37.5 billion.

Bitcoin first broke the $1,000 barrier in November 2013 but slipped significantly shortly after. It wasn’t until early this year that its value returned to the $1,000 range.

Meanwhile, the parent company of bitcoin options exchange operator LedgerX closed $11.4 million in funding led by  Miami International Holdings Inc and Huiyin Blockchain Venture Investments that supports LedgerX’s plan to operate a regulated exchange and clearing house for bitcoin and other digital currencies.

LedgerX is awaiting regulatory approval from the Commodity Futures Trading Commission to operate the first U.S. regulated exchange and clearing house for bitcoin options. On approval, participating institutions can use the LedgerX platform to obtain and hedge bitcoin using exchange-traded and centrally cleared options contracts.

“In the short term, these investments will further our application to become a regulated exchange and clearing house for bitcoin options,” Paul Chou, chief executive officer of LedgerX LLC, said in a statement.

“In the long term, these strategic investors will help us enter additional marketplaces and territories,” he added.

Bitcoin, a virtual currency that can be moved like money around the world quickly and anonymously without the need for a central authority, can be used to purchase goods and services from stores and online retailers.

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South Korean Won Down Amid U.S. Political Turmoil

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The South Korean won slipped for a third consecutive session to drop by more than a one-week low early on Friday as mounting uncertainty about Donald Trump’s presidency powered risk-aversion among investors in developing markets like South Korea.

The won was down at 1,126.9 against the US dollar as of 02:35 GMT, down 0.2 percent compared with Thursday’s close of 1,124.5. It had moved down as low as 1,131.1 as soon as the market opened.

A sharp acceleration in US factory activity gave the US dollar a lift on international exchanges, putting extra pressure on the won.

“It is true that the greenback itself strengthened in the global market, but the won seems to be losing more than expected due to strong risk-off mood in Asia region,” said Ha Keon-Hyeong, a Korean foreign exchange analyst.

He expected US dollar strength to continue in coming week, but saw won trading in a narrow range as end-month dollar-selling from local exporters will support the South Korean currency.

Meanwhile, Trump flatly denied he asked the Federal Bureau of Investigation to end a probe into possible collusion between his campaign team and Russia, but talked over the possibility that he could be impeached has made some investors in emerging markets look for safer havens.

U.S. President Donald Trump’s sacking of Comey last week set off a political firestorm after the latter had written a memo stating that Trump had asked him to drop a probe into his former national security advisor’s Russian connections.

Moreover, South Korean shares also edged up, with the Korea Composite Stock Price Index (KOSPI) barely closing up 0.07 percent at 2,288.48 as of 6:03 PM GMT.

Foreign investors turned to net buyers right before the closing bell, purchasing 23.9 billion won worth of KOSPI shares for the day.

Offshore investors had purchased 63.2 billion Korean won (S$78.11 million) worth of Kospi shares near mid-session.

Hyundai Motor Co. publicly denied a media report that it is seeking to introduce a holding company structure, though investors still made expectations. The company shares rose over 3 percent at 170,000 won while market heavyweight Samsung Electronics dropped 2.6 percent at 2,236,000 won.

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Nikkei slips after weak U.S. data, financial stocks underperform

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Japanese stocks slipped on Wednesday morning after the dollar eased against the yen on weak U.S. economic data, while financials stocks underperformed hit by lower US yields. The Nikkei shares average dropped  0.5 percent to 19,814.88 as of 2:15 AM EDT. The dollar slipped as well 0.5 percent to one-week lows against its perceived safe-haven Japanese counterpart and currently standing at 112.49 yen. Meanwhile, U.S. housing starts plummeted 2.6 percent to a seasonally adjusted annual rate of 1.17 million units, the lowest since November.

The market’s mood was further lessened by flagging confidence over the US president Donald Trump’s ability to push through tax reforms and stimulus programs that investors had been hopeful for since his election in November.

Recently, Trump asked his now-dismissed FBI Director James Comey to finish off the agency’s investigation into ties between former White House national security adviser Michael Flynn and Russia, according to a source who had seen a memo written by Comey.

“We still can’t say clearly that this Trump’s case is a serious risk to the stock market yet. But people are watching if it leads to more serious problems such as a difficulty for him to push through his tax reforms and fiscal policy,” said Takuya Takahashi, a strategist in Japan.

Overnight, financial stocks such as insurers and banks – that earn profits from investing in higher-yielding products stumbled after U.S. Treasury yields dropped down as low as 2.31 percent.

Moreover, Dai-ichi Life Holdings fell 4.0 percent, Sompo Holdings dropped 1.8 per cent, while Mizuho Financial Group flagged 2.4 per cent.

Domestic-demand-sensitive stocks, such as utility and food shares, gained as investors stayed defensive. Tokyo Gas moved up 2.3 percent, and Ajinomoto and Japan Tobacco both went up 1.3 per cent.

The broader Topix shed 0.5 percent to 1,575.82 and the JPX-Nikkei Index 400 declined 0.6 percent to 14,063.86.

While in commodities trading, Crude oil for June delivery was down 0.64% or 0.31 to $48.35 a barrel. Brent oil for delivery in July dipped as well 0.39% or 0.20 to hit $51.45 a barrel, while the June Gold Futures contract kept on increasing 0.50% or 6.20 to exchange at $1242.60 a troy ounce.

USD/JPY was down 0.56% to 112.49, while EUR/JPY rose 0.48% to 124.77.

The US Dollar Index Futures was down 0.13% at 98.06.

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