• Oil price drops further after OPEC delays meeting

    Oil price drops further after opec delays meeting - nigeria newspapers online
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    Oil prices recorded more loss on Thursday, after OPEC announced the shock delay of a key policy meeting, suggesting fresh upheaval in the bloc, while equities were mixed after two US reports dented recent euphoria over the future of interest rates.

    Both main crude contracts slipped on news that the much-anticipated gathering of the major producers combining OPEC and 10 allies would be put back by four days to November 30.

    Prices had dived almost five percent at one point Wednesday, before paring the losses.

    Reports indicated that the decision was made after Angola and Nigeria pushed back against lower targets that were urged by others, with Saudi Arabia said to have been preparing to extend a one-million-barrel-a-day output cut into the new year.

    Riyadh and Russia unveiled massive cuts earlier this year in a bid to boost prices, which have come under pressure owing to stuttering economies in the United States, Europe and particularly China.

    Pierre Andurand, of Andurand Capital Management, said global supplies were healthier than expected, meaning that the OPEC+ cartel would need to reduce its output.

    “The Saudis will probably want the other countries to cut as well. It’s going to be a negotiation,” Andurand told Bloomberg TV.

    Equity markets in Asia fluctuated, even after a fresh pre-Thanksgiving bounce on Wall Street.

    Hong Kong, however, bounced back from morning losses to edge higher in the afternoon, with developers in ascendance as it emerged China is preparing to offer the property sector more support, calling for banks to do more for the industry.

    This came after Bloomberg News reported on Wednesday that authorities had drawn up a draft list of 50 firms that would be eligible for more monetary support.

    Among the winners, struggling Country Garden soared more than 23 percent after it was reported the company was on the list. Another troubled developer, Evergrande, was up more than three percent.

    Elsewhere, Shanghai, Seoul, Wellington, Mumbai and Jakarta also rose but Sydney, Singapore, Taipei, Manila and Bangkok were in retreat.

    London, Frankfurt and Paris all rose at the open.

    The University of Michigan stated that the tepid performance came after data showed a pick-up in inflation expectations among US consumers, who now see it at 4.5 percent over the next year, against 4.4 percent previously expected.

    Separately, US jobless claims came in far lower than forecast, showing that the labour market continues to hold up.

    The Fed has repeatedly said it would make its rate decisions based on data, particularly inflation and jobs.

    The readings gave a little jolt to the good mood on trading floors that have been swirling since below-par consumer price figures last week reinforcing optimism the rate-hike cycle had ended and cuts could be on the way next year.

    “Markets can be capricious sometimes, and at the present junction, investors are looking for clues confirming the Fed is done with its current tightening cycle, thus evidence to the contrary can be unsettling,” said National Australia Bank’s Rodrigo Catril.

    The latest US data “triggered a (disproportionate) market reaction, US jobless claims and inflation expectations data did not support the story US inflation is easing against a weakening US labour market”, he said.

    Still, observers said the outlook was bright for equities.

    “We do expect the stock market rally to continue,” said Audrey Goh of Standard Chartered Bank.

    “If you look at inflation, that clearly has moderated, so that will allow the Fed to stand pat. Our expectation is that policy rates have peaked.”

    Hong Kong – Hang Seng Index: UP 1.0 percent at 17,910.84 (close)

    Shanghai – Composite: UP 0.6 percent at 3,061.86 (close)

    London – FTSE 100: UP 0.2 percent at 7,480.41

    Tokyo – Nikkei 225: Closed for a holiday

    West Texas Intermediate: DOWN 0.6 percent at $76.63 per barrel

    Brent North Sea crude: DOWN 0.7 percent at $81.36 per barrel

    Dollar/yen: DOWN at 149.10 yen from 149.59 yen on Wednesday

    Euro/dollar: UP at $1.0914 from $1.0890

    Pound/dollar: UP at $1.2516 from $1.2494

    Euro/pound: UP at 87.20 pence from 87.13 pence

    New York – DOW: UP 0.5 percent at 35,273.03 (close)


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