|03 March, 2019

Sunday outlook: Oil prices drop on demand growth concerns

Real estate stocks weighed on Dubai’s index on Thursday. Global markets received a boost on Friday over hopes of a trade deal between the U.S. and China

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 retreat on weak U.S. manufacturing data
  • Trade deal hopes boost global markets
  • Real estate shares weigh on Dubai’s index
  • Dollar gains, gold drops

Oil prices

Oil prices dropped on Friday due to concerns over global demand growth and weak U.S. manufacturing data.

The ISM (Institute for Supply Management) manufacturing activity index in February sank to the lowest since November 2016, and was below expectations.

U.S. West Texas Intermediate crude (WTI) futures fell $1.42, or 2.5 percent, to settle at $55.80 per barrel, after hitting $57.88, its highest since mid-November.

Global benchmark Brent crude futures for May settled $1.24, or 1.9 percent, lower at $65.07 a barrel.

“We have been the island of prosperity, globally, so if the economic slowdown is coming our way that is bad news for oil prices,” John Kilduff, a partner at Again Capital LLC in New York, told Reuters. “We were up all morning until that data hit,” he said.

Global markets

Optimism over a trade deal between the United States and China boosted global markets on Friday.

“They may be moving toward a trade deal, and the market is anticipating that and getting ahead of it,” Chad Morganlander, senior portfolio manager at Washington Crossing Advisors in Florham Park, New Jersey, told Reuters.

MSCI’s gauge of stocks across the globe gained 0.4 percent.

On Wall Street, the Dow Jones Industrial Average rose 110.32 points, or 0.43 percent, to 26,026.32, the S&P 500 gained 19.2 points, or 0.69 percent, to 2,803.69 and the Nasdaq Composite added 62.82 points, or 0.83 percent, to 7,595.35.

Middle East markets

Dubai’s index dropped 1.5 percent on Thursday with Emirates NBD down 4.2 percent, Emaar Development 4.7 percent lower and Emaar Malls slid 3.9 percent.

The Abu Dhabi index fell 0.3 percent, led by a 9.1 percent decline in Abu Dhabi National for Building Materials and a 3.3 percent drop in Aldar Properties.

Saudi Arabia's index rose 0.2 percent, boosted by a 4.7 percent jump in Leejam Sports’ shares, while Al Tayyar rose 1.1 percent after the firm's board proposed a capital increase to 3 billion riyals ($799.96 million) from 2.10 billion riyals.

Qatar's index was down 0.2 percent, pulled lower by blue-chips Qatar Electricity and Water and Industries Qatar, which fell 1.9 percent and 1.4 percent, respectively.

Egypt’s EGX30 edged 0.2 percent higher, Kuwait’s premier market index fell 1 percent while Bahrain’s index dropped 0.4 percent and Oman’s index added 0.8 percent.

Currencies

The dollar rose on Friday.

The dollar index, which measures the greenback against a basket of six major currencies, rose 0.4 percent on Friday, posting its largest daily percentage gain in two weeks.

Precious metals

Gold prices dropped on Friday as the dollar strengthened.

Spot gold was at $1,293.38 an ounce at 1918 GMT.

U.S. gold futures settled down 1.3 percent at $1,299.2.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


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