|17 September, 2019

Tuesday outlook: Oil prices pull back, stocks drop

Brent crude was down 77 cents, or 1.1 percent, at $68.25 a barrel by 0051, while West Texas Intermediate was down 82 cents, or 1.3 percent, at $62.08 a barrel

Image used for illustrative purpose. Chinese labourers work at the Lunnan oilfield on October 11, 2006 in Lunnan county, Xinjiang Uygur Autonomous Region, China.

Image used for illustrative purpose. Chinese labourers work at the Lunnan oilfield on October 11, 2006 in Lunnan county, Xinjiang Uygur Autonomous Region, China.

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  • Oil prices drop slightly following rally
  • Global markets retreat on cautious sentiment
  • Tadawul’s index rebounds
  • Dollar gains, gold steadies

Oil prices

Oil prices dropped slightly early on Tuesday following a rally on Monday.

Brent crude was down 77 cents, or 1.1 percent, at $68.25 a barrel by 0051, while West Texas Intermediate was down 82 cents, or 1.3 percent, at $62.08 a barrel.

Crude prices surged by nearly 20 percent on Monday as they responded to an attack on Saudi facilities on Saturday, the biggest jump in almost 30 years, before closing around 15 percent higher.

Saudi Arabia is the world’s biggest oil exporter and, with its comparatively large spare capacity, has been the supplier of last resort for decades.

The attack on state-owned producer Saudi Aramco’s crude-processing facilities at Abqaiq and Khurais cut output by 5.7 million barrels a day.

Global markets

Asian shares also dropped on Tuesday as investors remained cautious.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.1 percent. Japanese stocks slid 0.48 percent, while Australian shares were down 0.18 percent.

“There is certainly a risk-off tone, but I’m surprised the markets are not reacting more,” Tsutomu Soma, general manager of fixed income business solutions at SBI Securities in Tokyo told Reuters.

“The U.S. and other countries have oil reserves, which helps sentiment in a case like this. You also have a lot of positions riding on the Fed meeting.”

Overnight on Wall Street, the Dow Jones Industrial Average fell 143.24 points, or 0.53 percent, to 27,076.28, the S&P 500 lost 9.38 points, or 0.31 percent, to 2,998.01 and the Nasdaq Composite dropped 23.17 points, or 0.28 percent, to 8,153.54.

Middle East markets

Saudi Arabia’s stock market closed 1 percent higher on Tuesday with its biggest lender National Commercial Bank surging 4.2 percent and Al Rajhi Bank rising 1.4 percent.

Dubai’s index edged 0.3 percent higher with the market heavyweight lender Emirates NBD gaining 0.8 percent.

The Abu Dhabi index rose 1.7 percent boosted by a 2 percent jump in the United Arab Emirates' biggest lender First Abu Dhabi Bank and a 2.6 percent rise in Emirates Telecommunications Group’s shares.

Qatar's index gained 1.1 percent with petrochemical maker Industries Qatar up 2.3 percent and Qatar National Bank 1.3 percent higher.

Kuwait’s premier market index dropped 2.2 percent, Egypt’s blue-chip index EGX30 dropped 0.4 percent while Oman’s index dropped 0.3 percent and Bahrain’s index fell 0.7 percent.

Currencies

The dollar rose early on Tuesday.

The dollar index .DXY, which measures the greenback against a basket of six major currencies, gained almost 0.5 percent and last stood at 98.624.

Precious metals

Gold prices firmed on Tuesday.

Spot gold was steady at $1,497.40 per ounce, as of 0112 GMT.

U.S. gold futures were down 0.4 percent at $1,504.9 per ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)


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