|04 November, 2018

Sunday outlook: Oil prices, stocks dropped at the end of last week

Oil prices dropped near 1 percent on Friday as concerns about oversupply worried investors. Global markets dropped on worries over a trade deal between the U.S. and China weighed on sentiment. More commentary on Middle East markets, currencies and precious metals

Image used for illustrative purpose. A nodding donkey rig pumps crude up from the ground on an oil field.

Image used for illustrative purpose. A nodding donkey rig pumps crude up from the ground on an oil field.

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  • Oil prices drop close to 1 percent
  • Global markets drop on trade concerns
  • Dubai’s index adds 0.7 percent pushed by real estate shares
  • Dollar rises, gold retreats

Oil prices

Oil prices fell close to 1 percent on Friday as the United States Secretary of State Mike Pompeo announced that eight top importers will be temporarily allowed to keep buying Iranian oil, as the U.S. imposes sanctions on Monday.

Iran said on Friday that it had no concerns over the reimposition of sanctions.

Brent crude futures fell 6 cents to settle at $72.83 a barrel. U.S. crude declined 55 cents to end the session at $63.14 per barrel, a 0.86 percent loss.

“It seems as though all the worries about tightening supplies due to the loss of Iranian barrels in the market have dried up,” Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut, told Reuters.

“On top of that, concerns regarding reduced global demand has also helped ... the market continues to search for a bottom.”

Global markets

Global markets erased their gains on Friday to close mostly lower as concerns about a trade deal between the U.S. and China weighed on sentiment.

MSCI’s gauge of stocks across the globe shed 0.06 percent.

On Wall Street, the Dow Jones Industrial Average fell 109.91 points, or 0.43 percent, to 25,270.83, the S&P 500 lost 17.31 points, or 0.63 percent, to 2,723.06 and the Nasdaq Composite dropped 77.06 points, or 1.04 percent, to 7,356.99.

“The stock market is focused on tariffs and they believe that increased tariffs are going to hurt the economy,” Mike Rask, director of trading at Hodges Capital in Dallas, told Reuters. “There was the belief overnight that we were close to a trade deal with China and now it looks like that is not the case.”

Middle East markets

Saudi Arabia’s index ended the day 0.4 percent lower on Thursday, as a drop in oil prices dragged petrochemical shares lower.

Saudi Chemical slid 3.9 percent after its third-quarter profit fell and City Cement Co lost 1.4 percent after reporting a loss in its third-quarter.

Saudi Arabian Mining Co (Ma'aden) was down 2.9 percent, while National Industrialization (National Industrialization3) dropped 1.4 percent.

The Dubai index rose 0.7 percent, boosted by its real estate and industrial shares. Emaar Properties was up 3.3 percent. Aramex added 5.1 percent after reporting a 37.8 percent rise in its third-quarter profit.

Abu Dhabi’s index edged 0.4 percent higher aided by a 0.6 percent gain in First Abu Dhabi Bank and a 14.3 percent jump in Abu Dhabi National Hotels.

Qatar's index dropped 0.2 percent. Commercial Bank fell 2.2 percent and Qatar National Bank slipped 0.5 percent.

Egypt’s index fell 0.3 percent as Sidi Kerir Petrochemicals Company fell 9.1 percent and Orascom Investment lost 5 percent.

Kuwait’s index gained 0.6 percent, Bahrain’s index edged 0.1 percent lower and Oman’s index was flat.

Currencies

The dollar rose on Friday while the Euro fell to $1.1394.

The dollar index, which measures the greenback against a basket of six major currencies, rose 0.19 percent.

Precious metals

Gold prices fell on a stronger dollar.

Spot gold was down 0.1 percent at $1,232.02 per ounce by 1556 GMT. U.S. gold futures were down 0.4 percent at $1,233.70 per ounce.

(Writing by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@thomsonreuters.com)


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