Oil Prices Fall More Than A Per Cent

Oil prices up with OPEC cuts US-China trade talks

Oil prices up with OPEC cuts, US-China trade talks

While recent progress seen in U.S.

Gold prices rose on Wednesday, with spot gold XAU= up 0.68 percent to $1,293.65 per ounce. The Shanghai Composite surged 0.7 percent to 2,553.83. Australia's S&P ASX 200 lost 0.4 percent to 5,774.60. Shares fell in Taiwan but rose in Singapore, Indonesia and the Philippines. Macy's suffered its biggest loss of all time, putting a drag on retailers.

On the demand side, the USA and China have continued their trade negotiations in Beijing since Monday. The S&P 500 index gained 0.5 percent to 2,596.64. The Russell 2000 index of smaller-company stocks climbed 0.5 percent to 1,445.43.

That added to advances since last week in equity markets around the world, following a strong US employment report and comments from the Federal Reserve chief that calmed worries USA interest rate hikes would hurt growth. He echoed the tone of Fed officials who were present at a meeting last month.

Stocks have rallied this week, helped by promises of patience from the Federal Reserve, the European Central Bank mulling more cheap money, and progress in trade talks between Washington and Beijing. A market-sensitive Fed is reassuring to investors who fear its tightening policies would send the USA economy into recession.

Abhishek Kumar, senior energy analyst at Interfax Energy in London, said higher oil prices so far this year "could well define a near-term trend despite uncertainties surrounding the US-China trade talks". The fact that talks lasted a day longer than planned, the release of conciliatory statements from both sides and the possibility of higher-level talks in the near future are fueling gains in Asia. Yet investors remain wary as they await concrete details of US-China trade negotiations, which are clouding the economic outlook.

US Pentagon developed plans to strike Iran, Wall Street Journal reports
In the same month, US Secretary of State Mike Pompeo also stated the US was willing to target Iran for the actions of its allies in Iraq.

ANALYST'S TAKE: "While there was agreement on less thorny issues such as agriculture and energy, USA demands for verification and enforceable targets on intellectual property rights, transfer of technologies and non-tariff barriers may not be that easily addressed", DBS Group Research strategists Eugene Leow and Neel Gopalakrishnan said in a commentary.

"The pessimism of market participants at the end of the year was excessive, and so we expected prices to rise", said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt.

Benchmark 10-year notes US10YT=RR were last down 2/32 in price to yield 2.7225 percent after earlier rising to 2.747 percent, the highest since December 28. Slowing inflation raises doubts about the health of the world's second largest economy.

ENERGY: Oil prices fell back after hitting their highest levels in nearly a month.

After seven days of straight gains, the United States crude drowned 1.7 percent to $51.68 per barrel and the Brent Crude fell by 1.9 percent to $60.53 a barrel, on Friday, GMT.

West Texas Intermediate crude closed at $52.36/bbl, completing a 23% recovery since hitting an 18-month low on Christmas Eve. WTI increased by 0.56 dollar to settle at 48.52 dollars a barrel, while Brent crude increased by 0.27 dollar to close at 57.33 dollars a barrel. The euro rose to $1.1559 from $1.1543.

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