Sunday outlook: Oil prices rise to levels last seen in 2014

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Sunday outlook: Oil prices rise to levels last seen in 2014

Oil prices surged more than 1 percent on Friday on tightening global supply. Global markets retreated, Wall Street flattened. More commentary on Middle East market, currencies and precious metals.

  • Oil prices add gains on tightening supply
  • Stock markets around the globe retreated on Friday
  • Dubai’s index outperforms the region, lifted by the banking sector
  • U.S. dollar rises, gold prices add gains

Oil prices

Oil prices surged more than 1 percent on Friday as market participants took into considerations the U.S. sanctions on Iran that will start from November 4.

Brent crude futures rose $1 to settle at $82.72 a barrel. The session high of $82.87 was the contract’s highest since November 10, 2014. In the third quarter, Brent has gained about 4 percent.

U.S. West Texas Intermediate (WTI) crude futures rose $1.13 to settle at $73.25 a barrel. The session high of $73.73 was the highest since July 11. The contract is up about 5 percent this month but down around 1 percent for the quarter.

“Potential for a supply shock because of declining oil production in Iran and Venezuela will remain bullish on oil prices, and the second round of U.S. sanctions on Iran in November will further support the sentiment,” Abhishek Kumar, senior energy analyst at Interfax Energy in London, told Reuters.

Global markets

An index of global stocks retreated on Friday, while shares on Wall Street ended the day mainly flat.

MSCI’s gauge of stocks across the globe shed 0.23 percent.

On Wall Street, the Dow Jones Industrial Average rose 18.38 points, or 0.07 percent, to 26,458.31, the S&P 500 lost 0.02 point, or -0.00 percent, to 2,913.98 and the Nasdaq Composite added 4.39 points, or 0.05 percent, to 8,046.35.

The pan-European FTSEurofirst 300 index lost 0.83 percent.

Worries about an Italian budget with a higher-than-expected deficit target, weighed on Italian and European shares.

“We are seeing safety trade due to the Italian crisis, people are coming in and buying U.S. paper and the dollar,” Peter Cardillo, chief market economist at Spartan Capital Securities in New York, told Reuters.

Middle East markets

Dubai’s index added 1.81 percent on Thursday and was the best performer among its peers in the region.

Emirates NBD shares gained 6.15 percent, Ajman Bank gained 1.45 percent and Dubai Islamic Bank rose 1.13 percent. An index of bank stocks listed on the Dubai Financial market gained 3.25 percent in value on Thursday according to data from Thomson Reuters Eikon.

Emirates NBD has gained in value by 15.85 percent so far this year. According to data from Thomson Reuters’ Eikon, four analysts have a ‘strong buy’ rating on the stock, six analysts have a ‘buy’ rating and one analyst has rated it as ‘hold’.

Abu Dhabi’s index added 0.36 percent, Saudi Arabia’s index was mainly flat adding 0.06 percent, Qatar’s index gained 0.57 percent, Kuwait’s index gained 0.16 percent, while Oman’s index added 0.5 percent and Bahrain’s index closed 0.12 percent lower.

Currencies

The U.S. dollar rose on Friday on a weaker euro.

The dollar index against a basket of six major currencies added 0.25 percent. The euro fell 0.31 percent to $1.1603.

Precious metals

Gold prices added gains on Friday.

Spot gold increased 0.9 percent to $1,193.32 per ounce by (1743 GMT), but touched its lowest since August 17 at $1,180.34 earlier in the session.

December U.S. gold futures settled up $8.80, or 0.7 percent, at $1,196.20 per ounce.

(Writing by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@thomsonreuters.com)


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Source: https://www.zawya.com/mena/en/story/Sunday_outlook_Oil_prices_rise_to_levels_last_seen_in_2014-ZAWYA20180930043312/