|21 January, 2019

Monday outlook: Oil prices, Asian shares edge higher

Oil prices edge higher on Monday as OPEC issued a list of oil production cuts on Friday. Asian shares firmed, tracking a rise on Wall Street at the end of previous week. More commentary on Middle East markets, currencies and precious metals

Recent gains in oil prices have begun to reverse ahead of a key OPEC meeting planned for Friday, June 22, 2018. Image used for illustrative purposes.

Recent gains in oil prices have begun to reverse ahead of a key OPEC meeting planned for Friday, June 22, 2018. Image used for illustrative purposes.

Getty Images/David McNew
  • Oil prices gain as OPEC issued a list of oil production cuts on Friday
  • Asian shares keep positive momentum, after rising 1.6 percent last week
  • Most stock markets in the Middle East retreated on Sunday
  • Dollar and gold prices strengthen

Oil prices

Oil prices firmed early on Monday as the Organization of the Petroleum Exporting Countries (OPEC) issued on Friday a list of oil production cuts by its members and other major producers for six months starting on January 1, to boost confidence in its oil supply reduction pact.

International Brent crude oil futures were at $62.83 per barrel at 0259, up 13 cents, or 0.2 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $53.92 a barrel, up 12 cents, or 0.2 percent.


“The global outlook remains murky, despite emerging positives from a dovish Fed (now boosting U.S. mortgage applications), faster China easing (China credit growth stabilizing) and a more durable U.S.-China truce,” U.S. bank J.P. Morgan said in a note, according to a Reuters report.

“Brent can remain above $60 per barrel on OPEC+ compliance, expiry of Iran waivers and slower U.S. output growth,” J.P. Morgan said.

Global markets

Asian shares rose in early trading on Monday, tracking a rise on Wall Street on Friday.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.4 percent higher, after rising 1.6 percent last week.

On Wall Street, the Dow Jones Industrial Average rose 336.25 points on Friday, or 1.38 percent, to 24,706.35, the S&P 500 gained 34.75 points, or 1.32 percent, to 2,670.71 and the Nasdaq Composite added 72.77 points, or 1.03 percent, to 7,157.23.

Investors will be waiting for more clarity from the United Kingdom later in the day, when British Prime Minister Theresa May’s ‘Plan B’ for Brexit is due to be presented to parliament.

Middle East markets

Most markets in the region retreated on Sunday.

Saudi Arabia’s index lost 0.8 percent with Al Rajhi Bank and Samba Financial Group falling 1.1 percent and 3.3 percent respectively.   

Abu Dhabi’s index edged 0.2 percent lower as Etisalat lost 0.6 percent, while the UAE's biggest lender First Abu Dhabi Bank (FAB) fell 1.4 percent and Aldar Properties lost 0.7 percent.

Dubai's index also lost 0.2 percent as Damac Properties lost 4.0 percent and Air Arabia fell 1.9 percent.

Qatar’s index lost 0.3 percent with telecom Vodafone Qatar shedding 1.8 percent and Qatar Gas Transport fell 1.5 percent.

Egypt’s blue-chip index EGX30 dropped 0.3 percent, Kuwait’s premier market index gained 0.3 percent, while Oman’s index edged 0.1 percent lower and Bahrain’s index gained 0.5 percent.


The dollar firmed on Monday, supported by a recovery in investor risk appetite.

The dollar index, which measures the greenback against a basket of six major currencies, steadied at 96.315 after climbing to 96.394 percent on Friday, its strongest since January 4.

Precious metals

Gold prices ticked higher on Monday.

Spot gold had risen 0.2 percent to $1,282.71 per ounce by 0103 GMT, while the United States’ gold futures were steady at $1,282.50 per ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)


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© ZAWYA 2019

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