|11 February, 2019

Monday outlook: Oil prices, Asian shares drop

Oil prices dropped on rising U.S. oil rigs, losses were limited by lower Venezuelan output. Asian shares dropped on concerns over trade tensions and the global economic growth. More commentary on Middle East markets, currencies and precious metals

Steam is emitted from a oil refinery in Sodegaura, Japan February 8, 2017. Picture taken February 8, 2017. REUTERS/Issei Kato

Steam is emitted from a oil refinery in Sodegaura, Japan February 8, 2017. Picture taken February 8, 2017. REUTERS/Issei Kato

Issei Kato
  • Oil prices drop on rising U.S. oil rigs
  • Asian shares drop on trade tensions and concerns over global economic growth
  • Most markets in the Middle East dropped on Sunday
  • Dollar, gold strenghten

Oil prices

Oil prices dropped early on Monday after a weekly report by Baker Hughes said on Friday that energy firms in the United States last week increased the number of oil rigs operating for the second time in three weeks.

Companies added 7 oil rigs in the week to Feb. 8, bringing the total count to 854.

U.S. West Texas Intermediate (WTI) crude futures were at $51.92 per barrel at 0144 GMT, down 80 cents, or 1.5 percent, from their last settlement.

International Brent crude oil futures were down 71 cents, or 1.1 percent, at $61.39 a barrel.

Oil prices were supported by U.S. sanctions on Venezuela and losses were limited.

“The issues in Venezuela continue to support prices. Reports are emerging that PDVSA is scrambling to secure new markets for its crude, after the U.S. placed additional sanctions on the country,” ANZ bank said on Monday, according to a Reuters report.

Global markets

Asian shares edged lower in early trading on Monday, on concerns over global economic growth and trade tensions between the U.S. and China.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.1 percent after it was toppled from a four-month top on Friday.

“After we went home on Friday, Asian equities closed the week weaker... reflecting an increased level of apprehension on whether or not the U.S. and China can find an agreement to de-escalate their trade tensions ahead of the March 1st deadline,” Rodrigo Catril, senior forex strategist at National Australia Bank, told Reuters.

On Friday on Wall Street, the Dow Jones Industrial Average fell 63.27 points, or 0.25 percent, to 25,106.26, the S&P 500 gained 1.83 points, or 0.07 percent, to 2,707.88 and the Nasdaq Composite added 9.85 points, or 0.14 percent, to 7,298.20.

Middle East markets

Most stock markets in the Middle East edged lower on Sunday.

Saudi Arabia’s index fell 0.5 percent as Al Rajhi Bank dropped almost 1 percent and Saudi Basic Industries was off by a similar margin.

Dubai’s index also dropped 0.5 percent with Damac Properties losing 3.2 percent.

Abu Dhabi’s index fell 0.6 percent as Aldar Properties ended 1.9 percent lower and First Abu Dhabi Bank fell 0.9 percent.    

The Qatari index also fell 0.6 percent as Industries Qatar dropped 0.7 percent and Vodafone Qatar was last down 1.8 percent.

Egypt’s blue-chip index EGX30 was mainly flat, Oman’s index edged up 0.2 percent while Kuwait’s premier market index was mainly flat and Bahrain’s index dropped 0.6 percent.

Currencies

The dollar was trading near six-week highs on Monday.

The dollar index, which measures the greenback against a basket of six major currencies, was marginally higher at 96.64, putting it on track for eighth straight day of gains.

Precious metals

Gold prices held steady on Monday as investors dumped equities and turned to safe havens.

Spot gold was steady at $1,313 per ounce at 0059 GMT.

U.S. gold futures were also firm at $1,317 per ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


Gain a deeper understanding of financial markets through Thomson Reuters Eikon

Our Standards: The Thomson Reuters Trust Principles

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2019

More From Markets