Il Nuovo Postiglione - Oil prices fall as OPEC+ plans to unwind cuts

NYSE - LSE

CMSD	-0.34%	20.69	$
CMSC	-0.53%	20.81	$
BCE	-0.59%	23.67	$
BTI	-1.12%	55.35	$
RIO	0.42%	103.27	$
BCC	2.64%	79.21	$
GSK	-1.96%	49.89	$
JRI	-0.58%	12.14	$
NGG	-0.06%	78.12	$
BP	0.52%	43.81	$
RBGPF	0%	70	$
RYCEF	0.7%	19.92	$
VOD	1.89%	16.9	$
RELX	-3.21%	35.51	$
AZN	-1.27%	162.7	$

Oil prices fall as OPEC+ plans to unwind cuts

ECONOMY 03.06.2024

Oil prices fall as OPEC+ plans to unwind cuts / Photo: Frederic J. BROWN - AFP

Oil prices fell Monday as the OPEC+ group of major crude producers signalled they would start to unwind output cuts later this year.

Text size:

Stock markets, meanwhile, mostly rose on renewed hopes for US interest-rate cuts.

Oil prices slipped after Saudi-led OPEC and its Russian-led allies said Sunday they would maintain output levels but begin to restore production from October, even as questions about China's economic recovery and a spike in US stockpiles cause investors to fret over demand.

"This deal looks to draw a line under attempts to drive energy prices sharply higher for the time being," said Joshua Mahony, chief market analyst at Scope Markets.

Brent, the international benchmark, fell more than two percent to below $80 per barrel for the first time since February.

The US contract, West Texas Intermediate, dropped 2.5 percent to $75.06 per barrel.

"Opec + surprised the market when it announced its decision on production quotas on Sunday," said XTB analyst Kathleen Brooks.

"While it will extend cuts for some key Opec members like Saudi Arabia and Russia well into 2025, it will also start to roll back some measures as soon as October, which is earlier than the market had expected," she said.

European natural gas prices meanwhile jumped more than 10 percent after the closure of a pipeline linking key producer Norway with Britain.

The Langeled pipeline was shut after "operational problems" occurred at the Sleipner Riser offshore platform that will require repair work, said Randi Viksund, spokeswoman for the Norwegian transport operator Gassco.

Europe's benchmark contract for natural gas climbed to 38.70 euros per megawatt hour before easing to 37.15 euros in afternoon trading. That remains far below 2022 levels struck after Russia's Ukraine invasion.

- Equities mostly higher -

Among stock markets, European indexes were broadly higher and Wall Street saw gains at the open except for the Dow, which treaded water after leading a late-session rally on Friday.

In Asia, Mumbai saw strong gains on expectations that India's Prime Minister Narendra Modi would secure a third term, potentially leading to further economy-boosting measures.

Pre-weekend news that the personal consumption expenditures (PCE) index -- the Fed's preferred measure of inflation -- slowed in April to the lowest level since December provided a boost to sentiment after equity weakness last week.

"Despite some rocky sessions which saw some sharp sell-offs, May was strongly positive" for stocks, said David Morrison, senior analyst at Trade Nation.

He noted that US Treasury yields had also eased back from last week, reflecting expectations that official rates will be heading lower later this year.

Attention now turns to Friday's release of US jobs data, as Fed officials have said looser monetary policy will depend on signs that tightness in the job market, which can fuel wage growth, is easing.

"Chance of a Federal Reserve rate cut -- or two (this year) -- could help improve the investor sentiment this week," Swissquote analyst Ipek Ozkardeskaya said.

Before then, the European Central Bank is widely expected to begin cutting rates at its meeting on Thursday even though inflation remains above the bank's target of two percent.

"If so, this will be the first time ever that it has led the US Federal Reserve in easing monetary policy," Morrison said.

Asian investors started June in a buoyant mood, pushing Hong Kong solidly higher thanks to a surge in Chinese tech firms, while Tokyo, Sydney and Seoul also posted gains though Shanghai edged lower.

- Key figures around 1345 GMT -

New York - Dow: DOWN 0.1 percent at 38,648.53 points

New York - Nasdaq: UP 0.9 percent at 16,879.54

London - FTSE 100: UP 0.5 percent at 8,315.15

Paris - CAC 40: UP 0.6 percent at 8,039.32

Frankfurt - DAX: UP 1.0 percent at 18,687.90

EURO STOXX 50: UP 1.0 percent at 5,033.23

Tokyo - Nikkei 225: UP 1.1 percent at 38,923.03 (close)

Hong Kong - Hang Seng Index: UP 1.8 percent at 18,403.04 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,078.49 (close)

Euro/dollar: UP at $1.0855 from $1.0852 on Friday

Pound/dollar: DOWN at $1.2741 from $1.2745

Euro/pound: UP at 85.18 from 85.12 pence

Dollar/yen: DOWN at 156.75 from 157.30 yen

West Texas Intermediate: DOWN 2.5 percent at $75.06 per barrel

Brent North Sea Crude: DOWN 2.2 percent at $79.35 per barrel

E.Danieli--INP

Featured

Bangladesh measles toll nears grim 1,000-child mark

Bangladesh's deadliest measles outbreak in decades is nearing the grim milestone of 1,000 child deaths, as a devastating epidemic sweeps through the country and crowded hospital wards fill with struggling babies.

Bolivia farmers return to streets over diesel price hikes

Several hundred coca farmers and supporters of former Bolivian president Evo Morales demonstrated in the central city of Cochabamba on Friday over the government's doubling of diesel prices, AFP reporters said.

S&P Revises Outlook on Freedom Holding Corp. and Core Subsidiaries to Positive

S&P Global Ratings has revised the outlook on the long-term credit ratings of Nasdaq-listed Freedom Holding Corp. and its four core operating subsidiaries from “stable” to “positive,” while affirming their international credit ratings.

Moody’s Assigns First-Time Insurance Financial Strength Ratings to Freedom Insurance and Freedom Life

Moody’s Ratings has assigned insurance financial strength ratings to two Freedom Holding Corp. (Nasdaq: FRHC) insurance subsidiaries for the first time. Freedom Finance Insurance JSC, operating as Freedom Insurance, received Ba1 local- and foreign-currency insurance financial strength ratings, while Freedom Life JSC received Baa3 ratings. Both carry stable outlooks.