Oil price nears six-month high

0
349
Dangote refinary

World oil prices jumped to near six-month highs on Tuesday as the United States tightened sanctions on Iran, sending shares of energy companies higher and boosting currencies of several major crude producers.
Brent crude oil futures rose 0.7 per cent to $74.57 per barrel by 0630 GMT, their highest since November, after Washington said it was ending all sanctions waivers for countries buying Iranian oil.
U.S. light crude rose 0.8 per cent to $66.10.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1 per cent, as gains in oil and gas producers offset losses in airlines and other transport sectors facing higher fuel costs.
Japan’s Nikkei closed up 0.2 per cent.

European markets looked set to track Asia’s rise, with London’s FTSE futures up 0.4 per cent and German DAX futures higher by 0.2 per cent.
The U.S. on Monday demanded all buyers of Iranian oil stop purchases by May 1 or face sanctions, a move to choke off Tehran’s oil revenues.
The White House said it was working with top oil exporters, Saudi Arabia and the United Arab Emirates to ensure the market was “adequately supplied,” but traders had already been worried about tight supplies.
“Oil prices are not so high that it crushes manufacturing by putting energy price inputs up, but it is producing a nice boost to oil-producing nations,’’ said Robert Carnell, Singapore-based Chief Economist and Head of Research for the Asia Pacific at ING.
Carnell sees Brent crude’s sweetspot at between $65 and $75 per barrel.
“Above this, you may see some negative impact.’’
In China, major benchmarks flitted in and out of negative territory amid concerns that Beijing will slow the pace of further policy easing after unexpectedly strong first-quarter economic data last week.
China’s blue-chip stocks have surged over 30 per cent so far this year on expectations of more stimulus and hope Beijing and Washington will reach an agreement to end their nine-month-long trade dispute.
“We’ve had a fantastic run in Chinese equities year-to-date, some profit taking is completely normal.
“I don’t think China is changing its policy that quickly,’’ said Stefan Hofer, Chief Investment Strategist at LGT Bank Asia in Hong Kong.
On Wall Street, stocks hovered near break-even on Monday as the benchmark S&P 500 index was about one per cent away from its record high hit in September, while the S&P energy index jumped on higher oil prices.
Despite recent gains in oil prices, many investors still expect inflation to be well-contained in major economies including the U.S., allowing the Federal Reserve to keep a dovish stance.
The world’s largest economy reported worse-than-expected fall in home sales on Monday, as rising demand continued to be frustrated by a lack of properties.
“The data is pointing to the Fed being as accommodative as possible, which, for Asian investors, is good news,’’ said Jim McCafferty, Hong Kong-based Head of Equity Research, Asia ex-Japan, at Nomura.
In the currency market, the dollar index, which measures the greenback against six major currencies, eased 0.2 per cent overnight and last traded steady at 97.384.
The index hit a two-week high of 97.485 on Thursday, before the start of Good Friday and the Easter weekend.
Against the Japanese yen, the dollar was 0.04 per cent weaker at 111.88 yen, while the euro was slightly softer by 0.06 per cent against the greenback at 1.1248.
With the jump in the oil, one of Canada’s major exports, the loonie rose 0.4 per cent against its U.S. counterpart overnight and last traded at C$1.3369.
On Monday, the Russian ruble hit its highest level against the euro in more than a year and a one month-peak versus the dollar, also driven by the jump in oil. (Reuters/NAN)

LEAVE A REPLY

Please enter your comment!
Please enter your name here