In general, negative dynamics were observed on the oil market. Prices for "black gold" declined due to news about increasing of the number of initial applications for unemployment benefits in the United States.
As a result of trades on Aug. 20, on the New York Mercantile Exchange the price of futures for WTI crude oil with delivery in September fell by $0.12 to $72.54 per barrel. Yesterday the validity of the September contract expired. The cost of the October contract fell $0.92 to $72.91 per barrel. On the InterContinental Exchange in London, the October contract for Brent Crude oil dropped in price by $1.26 to $73.33 per barrel.
Oil prices fell after the report was published by the U.S. Department of Labor regarding applications for unemployment benefits one week prior to August 15. Unexpectedly the number of the initial applications increased by 15,000 to 576,000 compared to 561,000 a week earlier. Experts expect a further reduction to 550,000. The number of repeated applications increased by 2,000 to 6.241 million while the figures of the previous week were revised upwards, from 6.202 million to 6.239 million.
Nevertheless, the data on the labor market seriously cooled optimism of oil market participants, caused by the news on significant reduction of oil reserves in the United States. During the week until August 14 oil reserves in the United States reduced by 8.4 million barrels and comprised 343.6 million barrels. The report by the Department of Labor raised fears of investors that the increase in unemployment would slow economic recovery - despite the improvement in the U.S. economy, companies still have to cut costs through reduction of employees.
Due to positive macroeconomic data, the index of "blue chips" of Dow Jones Industrial Average added 0.76%, high-tech NASDAQ rose by 1.01% while Standard & Poor's 500 broad-market index finished the day higher by 1.09%. Growth was also observed in European markets. The British FTSE 100 rose 1.43%, French CAC-40 - 1.59% and the German DAX - 1.51%. The growth in the stock markets raised optimism of market participants regarding the oil situation in the economy that somewhat compensated for news about the growing number of unemployed in the United States and supported oil prices at levels above $70 per barrel.
"Oil prices continued to gain good support at levels above $70 per barrel, analysts of Barclays Capital note. - We consider the current phase as a consolidation before the period of sustainable improvement of the data and balance on the oil market, which will create a foundation for sustainable growth of up to $75 per barrel. The oil reserves are still at high levels, but the improvement in demand and reduction in supply can accelerate washing out surplus reserves, which will support prices".
Currency market
Last week the official rate of the manat against the US dollar, set by the Central Bank of Azerbaijan, consolidated 0.0001 points or 0.01 percent. The average rate was established at 0. 0.80402 manats to 1 U.S. dollar.
Last week the maximum rate of the US dollar compared to manat was established on Aug. 18 (0. 8041 manats to 1 U.S. dollar) and minimum on Aug. 17 and 19-21 (0.8040 manats to 1 U.S. dollar).
As a result of last week's exchange rate of the Azerbaijani manat to the U.S. dollar, established based on results from the Baku Inter-bank Currency Exchange (BICEX), consolidated by 0.0004 points (0.04 percent). The average rate was fixed at 0.80394 to 1 U.S. dollar.
Deals concluded last week at BEST with transition to currency (T+0) comprised: On Aug. 17, $3 million with the average sustained rate of 0. 8041 manats to 1 U.S. dollar, Aug. 18, $0.31 million with the average sustained rate of 0. 8041 manats to 1 U.S., Aug. 19, $2.28 million with the average sustained rate of 0. 8041 manats to 1 U.S. dollar, on Aug. 20, $0.05 million with the average sustained rate of 0. 8037 manats to 1 U.S. dollar and on Aug. 21, $0.3 million with the average sustained rate of 0. 8037 manats to 1 U.S. dollar.
No deal was concluded with USD/AZN T+1, T+2 and SWAP_USD/AZN due to an absence of appeals by dealers. Appeals were not received on RUB/AZN and EUR/AZN (Ň+1, Ň+2).
Market of privatization shares
Last week the price of the privatization vouchers remained dropped by one manat, purchase was 8 manats, and sale - 9 manats. Prices remain the same for several months, which is explained by reduction of rates of state property privatization, as the State Property Committee is currently undergoing structural transformation. The validity period of the vouchers will expire on Jan. 1 2010. So far, around 75 percent of vouchers has been derived, and another extension of their validity period remains uncertain.