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Oil and equities higher on US-China trade deal hopes

Brent oil field6am: Oil prices were higher after OPEC cut production in January and Saudi Arabia indicated there would be a further reduction of 500,000 barrels in March.

Brent crude futures were up 69 cents (1.1%), at $63.11 a barrel while US crude oil futures were up $53.64 a barrel (1%) after rallying 1.3% on Tuesday.

Prices are being boosted by supply issues in OPEC-member Venezuela which is engulfed in a political and economic crisis and facing export sanctions by Washington against state-owned energy firm PDVSA.

Despite the price rises, analysts say global oil markets remain well supplied, partly on weaker demand and high inventories. The US is currently the world’s biggest oil producer ahead of Russia and Saudi Arabia.

Equities buoyant

The FTSE 100 ended Tuesday marginally ahead, adding around four points at 7,133 on hopes of a US-China trade deal which also lifted Asian stocks above a four-month high.

There is also hope that a Congressional spending deal would avert another US government shutdown.

Asia followed rallies on Wall Street, where the Dow and Nasdaq each rallied about 1.5%. Japan’s Nikkei average climbed 1.3% to reach an eight-week high, while South Korea’s KOSPI gained 0.5%.  China’s Shanghai Composite was 0.4% higher and Hong Kong’s Hang Seng was up 0.6%.

US President Donald Trump said he would consider extending the deadline for reaching a trade agreement with China if talks continued to make progress.

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