Oil Extends Rally to 5-Week Highs on Talk of Producer Action

Stocks at Record Highs as Oil Jumps

تم نشره في Mon 15 August / Aug 2016. 12:00 AM
  • A view of an oil refinery off the coast of Singapore. – (Reuters)

INTERNATIONAL — Oil prices hit five-week highs on Monday, gaining about 10 per cent in a 3-day rally as speculation intensified over potential producer action to support prices amid a crude glut.

Brent crude rose USD1.08, 2.3 per cent, to USD48.05 a barrel, down from an earlier high of USD48.10;, its highest since July 7th. Brent has gained about 10 per cent cumulatively in the past three sessions, its most in such a stretch since May. Since the start of August, it is up 12 per cent.

Data from market intelligence firm Genscape estimating a draw of more than 350 thousand barrels at the Cushing, Oklahoma delivery point for US crude futures last week added to the bullish sentiment, said traders who saw the data.

US West Texas Intermediate crude gained USD1.06, 2.4 percent, to USD45.55, after rallying earlier to USD45.61, a peak since July 21st. WTI has gained nearly 10 per cent on the month.

On the other hand, US stock indexes were trading at all-time highs on Monday, building on the record-setting rally of the past few weeks, as oil prices jumped.

Strong economic data, upbeat corporate earnings and low interest rates have stoked appetite for US equities, driving all three major indexes to record highs. The S&P 500 index has notched 13 record intraday highs since July, including on Monday.

Investors are awaiting the minutes of the Federal Reserve's July policy meeting for more clues on when it would raise interest rates. The minutes are due at 2 p.m. ET on Wednesday.

However, traders are largely sceptical of a rate hike in the near term, with US inflation below the Fed's 2 per cent target and as central banks worldwide unleash stimulus programs to support their economies.

The odds of a hike stand at 12 percent for September and rise to about 38 percent for December, according to CME Group's Fedwatch tool.

Post Properties (PPS.N) shares rose to a record high after the company agreed to be bought by Mid-America Apartment Communities (MAA.N) for about USD3.88 billion. Mid-America's shares fell 5.7 percent.

(Reuters)

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