Equities pulled lower by oil, China concerns

NEW YORK - Global equities were lower on Monday, pressured by another downdraft in oil prices and worries over growth in China's economy, while the holiday season kept trading volumes muted.

Prices of both Brent and U.S. crude dropped more than 3 percent , reversing a brief rebound and dragging U.S. energy shares down 1.8 percent as the worst performing of the major S&P sectors.

Crude again moved within sight of an 11-year low. Brent settled at $36.62 and U.S. crude settled at $36.81 as last week's short-covering dried up and players worried that prices had more room to swoon.

"You have energy and tax-loss harvesting moving markets back and forth in these last few weeks," said Tim Courtney, Chief Investment Officer at Exencial Wealth Advisors, which oversees $1.4 billion in assets.

In contrast to oil, U.S. natural gas prices settled up 10 percent at $2.228 per million British thermal units as forecasts for colder temperatures led to bets that long-delayed winter weather was finally arriving.

The Dow Jones industrial average fell 23.9 points, or 0.14 percent, to 17,528.27, the S&P 500 lost 4.45 points, or 0.22 percent, to 2,056.54 and the Nasdaq Composite dropped 7.51 points, or 0.15 percent, to 5,040.99.

A weak batch of industrial profits raised concerns about China's economy and sent Chinese stocks lower by almost 3 percent, their biggest drop in a month.

Profits at Chinese industrial companies in November fell 1.4 percent from a year earlier, the sixth consecutive month of decline and another sign that the world's chief engine of growth for the past decade is sputtering.

MSCI's broadest index of Asia-Pacific shares outside Japan gave up early modest gains to fall 0.53, putting it on track for a 12-percent loss this year.

With trading light in the United States and Europe between Christmas and the upcoming New Year's holidays, as well as a holiday on Monday in the United Kingdom, markets could see exaggerated moves this week.

MSCI's all-country world index lost 0.22 percent, while the pan-European FTSEurofirst 300 index closed down 0.54 percent.

In Europe, the drop in oil prices put pressure on energy stocks such as Repsol and Total.

Yields on benchmark 10-year Treasury notes inched down to 2.2322 percent, up 3/32 in price.

The dollar edged lower against a basket of major currencies, off 0.03 percent at 97.951 as bullish bets on the currency this year on a U.S. Federal Reserve rate hike met year-end profit-taking.

But the drop in oil prices hurt currencies linked to the commodity, such as the Australian and Canadian dollars.

The Australian dollar fell 0.1 percent to $0.7248 while its Canadian counterpart fell 0.6 percent to $1.3902, heading back towards this month's 11-year lows.

Spot gold was down 0.7 percent at $1,068.19 an ounce and was on track for its sixth straight quarterly decline, its longest run of quarterly losses since the mid-1970s. —Reuters

Crude oil falls after US growth figures disappoint

TOKYO – Crude futures dropped in early Asian trading on Friday after the release of a report showing that US economic growth had slowed sharply, reinforcing concerns about sluggish demand in a world awash with oil.

US economic growth braked sharply in the third quarter as businesses cut back on restocking warehouses to work off an inventory glut, data showed.

Both of the main crude benchmarks are on track to post their first weekly gains in three weeks, but with oil still being added to inventories, prices are likely to be range-bound in the coming weeks, traders and analysts said.

US crude was down 24 cents at $45.82 a barrel at 0140 GMT, after rising 12 cents in the previous session. The benchmark is on track to post a gain of 2.7 percent this week.

Brent crude fell 11 cents to $48.69 a barrel after ending 20 cents lower on Thursday and is heading for an increase of 1.5 percent this week.

The sluggish US growth figures and weak home sales numbers have tempered the market's positive reaction to government figures earlier in the week showing oil stockpiles last week had increased by 3.4 million barrels, which was below the estimate from an industry group.

That had sent prices sharply higher with US crude rallying nearly $3 a barrel. – Reuters

Oil steadies after strong gains as equities rally

LONDON – Oil prices steadied on Friday after bouncing back from six-and-a-half-year lows on recovering equities markets, strong US economic growth and news of low crude supplies from Nigeria.

Oil saw its biggest one-day bounce since 2009 on Thursday, with North Sea Brent and US light crude  rising more than 10 percent. US crude is on track for its first weekly gain in nine weeks, ending its longest losing streak since 1986.

Global oil markets have fallen by a third since May and are still well under half their value a year ago thanks to a huge oversupply of fuel and sluggish demand. Worries over China's economy have compounded the falls in recent weeks.

But analysts said oil markets fell too far, too fast and a rebound was on the cards. A stock market rise, strong US growth data and a pipeline outage in Nigeria provided an excuse for a recovery on Thursday, they added.

"A short-covering rally, led by crude oil, pushed commodities higher across the board," analysts at ANZ said in a note to clients.

"Better-than-expected US GDP numbers were the main spark, although the force majeure on... exports from Nigeria extended the gains."

Brent was down 15 cents at $47.41 a barrel by 1015 GMT. It settled $4.42 higher at $47.56 on Thursday. US crude was unchanged at $42.56 a barrel, after ending up $3.96.

Asian shares extended a global rally on Friday with Chinese stocks jumping for the second day following a rocky start to the week.

The US economy grew faster than initially thought in the second quarter on solid domestic demand. Gross domestic product expanded at a 3.7 percent annual pace instead of the 2.3 percent rate reported last month, the Commerce Department said.

Shell's Nigerian unit declared force majeure on Bonny Light crude oil exports on Thursday after shutting two key pipelines in the country due to a leak and theft.

Venezuela has been contacting other members of the Organization of the Petroleum Exporting Countries, pushing for an emergency meeting with Russia to come up with a plan to boost oil prices, the Wall Street Journal reported.

Officials at core OPEC members in the Middle East Gulf say there is little chance of the cartel meeting without the support of Saudi Arabia, which has said it sees no need for a gathering. – Reuters

Oil falls as IEA warns stocks may approach all-time high

LONDON - Brent crude fell below $58 a barrel on Tuesday after the International Energy Agency (IEA) warned that oil prices may decline as stocks continue to increase this year.

Oil stocks held by countries in the Organisation for Economic Cooperation and Development may come close to the all-time high of 2.83 billion barrels in the middle of 2015, said the IEA, which advises the West on energy policy.

"Despite expectations of tightening balances by end-2015, downward market pressures may not have run their course just yet," the IEA said in a monthly report.

Brent crude LCOc1 slipped 44 cents to $57.90 by 1123 GMT (06:23 am. EST), ending a three-day rally. The benchmark gained more than 9 percent last week, its biggest weekly rise since February 2011.

U.S. crude futures CLc1 dropped to $52.02, down 84 cents.

Vitol chief Ian Taylor, speaking at the International Petroleum Week industry conference, said he expected a "dramatic" build in oil stocks over the next few months but that supply and demand in the oil market would move into balance in the second half of this year.

China's consumer inflation hit a five-year low for January, raising worries about oil demand in the world's second-largest economy.

"Economic activity is slowing, especially in heavy industry and that inevitably weighs on commodities," Michal Meidan, director of independent consultancy China Matters, said in the Reuters Global Oil Forum.

Oil prices received a boost on Monday after a monthly report by the Organization of the Petroleum Exporting Countries (OPEC) raised the forecast for 2015 demand for its oil to 29.2 million barrels per day (bpd), up 430,000 bpd from an earlier forecast.

The IEA's medium-term report released on Tuesday predicted demand for OPEC oil would hold at 29.4 million bpd this year, and said U.S. shale oil output growth would pause before regaining momentum.

U.S. crude snapped three days of gains after a preliminary survey showed that U.S. commercial crude stockpiles likely hit a record high last week.

"Another report of strong builds in inventories in this week's EIA market report could halt oil's rally," ANZ bank said, referring to the U.S. Energy Information Administration's stockpile data due on Wednesday.

Elsewhere, Libya's Hariga port has reopened after guards ended a strike over salary payments, and the terminal will start loading tankers once better weather allows, a facility spokesman said.  — Reuters

Oil prices up with Ukraine crisis in focus

SINGAPORE – Oil prices rose in Asia Wednesday, underpinned by concerns about the Ukraine crisis as fierce armed confrontation between government forces and pro-Moscow separatists continued unabated leaving dozens dead.

US benchmark, West Texas Intermediate (WTI) for delivery in July, rose seven cents to $104.18 in late-morning trade.

Brent North Sea crude for July gained 29 cents to $110.31 per barrel.

Ukraine's interim pro-Western government said Tuesday it had recaptured an airport in the eastern city of Donetsk from pro-Russian insurgents after a day of air strikes and fierce gun battles.

Donetsk mayor Oleksandr Lukyanchenko said two civilians and 38 combatants had died and another 31 were wounded, including Russians and possibly Chechens.

"Traders are still keeping an eye on Ukraine developments especially the continued fighting in the Eastern part as well as developments in Libya," said Singapore's United Overseas Bank in a note to investors.

The dramatic escalation in tensions comes a day after billion chocolate baron Petro Poroshenko was confirmed as the country's new president following weekend polls triggered after pro-Russian leader Viktor Yanukovych was ousted in February.

Washington and its European allies supporting Ukraine's interim government have accused Russia of fomenting unrest in the country, allegations Moscow denies.

Investors fear a full-blown conflict in the ex-Soviet state, a conduit for a quarter of European gas imports from Russia, will disrupt supplies and send energy prices soaring.

Kelly Teoh, managing director at I.R. Resources in Bangkok, said oil prices were also supported by hopes of a further drop in US crude stockpiles, indicating robust demand in the world's top crude consumer ahead of the busy summer driving season.

US crude stocks plunged 7.2 million barrels in the week to May 16, the Department of Energy revealed last week.

The weekly US official crude stockpiles report will be released on Thursday instead of Wednesday this week, because of the long Memorial Day holiday weekend. – Agence France-Presse

source: gmanetwork.com