Oil down ahead of producer meeting; US$ slips


  • Business
  • Friday, 15 Apr 2016

International benchmark Brent crude futures managed to defend $40 per barrel in early trading on Tuesday, standing at $40.51 at 0154 GMT, down 33 cents from their last settlement. On Monday, the contract had surged over 5.5 percent in intra-day trading and remains 50 percent above 2016 lows from Jan. 20

NEW YORK: Crude oil prices fell on Friday ahead of a weekend meeting that could yield an output freeze by major producers, while the U.S. dollar and stocks across the globe edged lower but posted weekly gains.

On Wall Street, energy stocks led the market slightly lower as oil fell, and Apple shares also weighed after Nikkei business daily reported Apple will continue its reduced production of iPhones in light of sluggish sales.

The S&P 500, however, posted its seventh positive week in the last nine.

The MSCI index of stocks across the globe <.MIWD00000PUS> hit its highest point of the year on Thursday and emerging market stocks <.MSCIEF> racked up their best weekly gain in six. European shares <.FTEU3> fell 0.3 percent but posted their largest weekly gain in two months.

On Friday, the Dow Jones industrial average <.DJI> fell 28.97 points, or 0.16 percent, to 17,897.46, the S&P 500 <.SPX> lost 2.05 points, or 0.1 percent, to 2,080.73 and the Nasdaq Composite <.IXIC> dropped 7.67 points, or 0.16 percent, to 4,938.22.

Japan's Nikkei <.N225> closed 6.5 percent higher for the week.

China's economy grew 6.7 percent in the first quarter from a year earlier, meeting expectations and providing additional evidence that a slowdown in the world's second largest economy may be bottoming out.

The dollar index <.DXY> slipped 0.2 percent after the U.S. currency had gained more than 1 percent against both the yen and the euro earlier this week.

Speculation was still rife about whether top oil producers led by Saudi Arabia and Russia will be able to reach a deal in Qatar on Sunday to curb output.

"I think the fact that oil producers are talking suggests that the psychology of the market has changed a little bit and probably the worst of the oil price declines is behind us. This would be good for risk sentiment going forward," said Shaun Osborne, chief currency strategist at Scotiabank in Toronto.

Brent crude futures were down 1.7 percent at $43.10 and U.S. crude fell 2.7 percent, trading at $40.40. Both finished the week higher after rallies of about 8 percent in the previous week.

U.S. Treasury yields fell after the weaker-than-expected economic data, which suggests sluggish inflation and could prompt Federal Reserve Chair Janet Yellen to hold off on raising U.S. interest rate hikes further according to Lou Brien, markets strategist at DRW Trading in Chicago.

"We do have a bid in the market and I think it’s because of the continued weakness in industrial production and utilization," Brien said.

Benchmark 10-year Treasury note rose 8/32 in price to yield 1.7535 percent, from 1.781 percent late Thursday.

Safe-haven gold posted a weekly loss, the first in three.- Reuters
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