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EUROPE-MARKETS
Oil prices near six-month highs as stock markets retreat
LONDON, April 26, 2019 (BSS/AFP) – Oil prices closed in on six-month highs
Thursday amid supply concerns stoked by the United States tightening the
screws on sanctions-hit Iran.
Stock markets meanwhile mostly dropped, with European traders digesting
news of the collapse of two mega-mergers in the supermarket and banking
industries.
Wall Street meanwhile opened mixed amid a raft of US corporate giants
releasing earnings reports, including positive news from Microsoft and
Facebook.
“Brent crude oil has rallied above $75 a barrel for the first time this
year on the back of tighter sanctions on Iran, while gains in West Texas
Intermediate (WTI) have been curtailed by a surge in US supply,” noted Dean
Popplewell, markets analyst at Oanda trading group.
Brent North Sea crude for delivery in June jumped to $75.60 per barrel,
the highest level since the end of October, before falling back slightly.
West Texas Intermediate (WTI) prices reached $66.28 per barrel — just
0.03 cents away from its own six-month high — before it dropped.
The US removal this week of waivers that allowed countries to buy oil from
sanctions-hit Iran is expected to hit supplies, though analysts are keeping
watch on the region and whether OPEC responds by opening up the taps.
Oil prices had already enjoyed a strong recovery this year, with output
capped by Russia and the OPEC cartel as well as unrest in Venezuela and
Libya.
Oil kingpin Saudi Arabia on Wednesday said it had no immediate plans to
raise oil output to offset the move by Washington.
Iran’s supreme leader Ayatollah Ali Khamenei called the end of oil
sanction waivers by the US a “hostile measure” that “won’t be left without a
response”.
MORE/HR/1028
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BCN-14
EUROPE-MARKETS 2 LAST LONDON
– Mergers collapse –
In the stock markets, Asian equities stuttered after New York indices
retreated Wednesday from record highs, with weak economic data around the
world offsetting a forecast-beating earnings season.
While the mood on trading floors remains broadly positive after a
blockbuster start to the year, there are lingering concerns that growth in
most parts of the world is well off the pace of the United States.
There was further negativity in Asia, with South Korea on Thursday
reporting its biggest quarterly contraction since late 2008. The 0.3 percent
drop was also its first fall since the last three months of 2017.
The data comes after investors have been on a buying spree for much of the
year, fuelled by optimism that China and the US will hammer out a deal to end
their trade war, as well as central bank dovishness.
Shanghai was the main loser Thursday, ending down 2.4 percent on concerns
the Chinese government could ease up on a recent run of mini stimulus
measures that have supported the economy and equities.
European stock markets were solidly down, with shares in Deutsche Bank
flattened and Commerzbank dropping 2.7 percent after Germany’s two biggest
lenders ended merger talks.
British supermarket Sainsbury’s meanwhile slid 4.4 percent after the UK’s
competition watchdog blocked its proposed merger with Walmart-owned Asda.
In foreign exchange news, the euro dropped to $1.1118, its lowest level
since June 2017, before rebounding slightly.
“The euro is cheap, dragged down by weak growth, political uncertainty and
two-year bond yields that are even lower than Japan’s,” said Kit Juckes,
macro strategist at French bank Societe Generale.
BSS/AFP/HR/1030