Oil extends gains, eyes on $100 a barrel, but Asia markets down

03-Oct-2018 Intellasia | AFP | 6:00 AM Print This Post

Oil prices built on gains Tuesday after another blistering rally but most markets were in retreat as traders brushed off a positive lead from Wall Street and the US-Mexico-Canada trade deal.

Crude has motored in recent weeks on concerns about supplies after sanctions are imposed on Iran next month, while OPEC’s decision not to ramp up output, upheaval in Venezuela, a strong dollar and a drop in oil rigs have also pushed prices higher.

“Right now, we’re just in a bull market for oil because of the prospects of a very tight market later on in the year,” John Kilduff, founding partner at New York-based hedge fund Again Capital LLC, told Bloomberg News.

Both main contracts jumped almost three percent Monday and clocked up fresh gains in Asia, with observers and key players in the sector now eyeing $100 a barrel.

Kim Kwangrae, a commodities analyst at Samsung Futures, added: “The market’s very keen to figure out the size of the impact from the Iranian supply disruptions and whether Saudi Arabia and Russia are able to make up for the losses.

“At the same time, the US-Mexico-Canada Agreement is also improving the overall sentiment on oil.”

New York traders sent the Dow and S&P 500 higher after the United States-Mexico-Canada Agreement (USMCA) was announced Sunday to replace the North American Free Trade Agreement.

The deal drew an end to months of uncertainty after Donald Trump had threatened to tear up the decades-old NAFTA.

– Dollar stronger –

However, Asia was unable to follow suit. Hong Kong reopened after a long weekend to fall 2.4 percent, with data indicating a drop in Chinese manufacturing activity denting sentiment.

The “HSI is trading with a negative bias, playing catch up from yesterday’s holiday, in reaction to the weaker China (manufacturing) data”, said Stephen Innes, head of Asia-Pacific trade at OANDA. “It’s more than apparent Hong Kong investors are in no mood to join the revamped NAFTA festivities.”

Sydney shed 0.8 percent, Singapore fell 0.5 percent and Seoul was off 1.3 percent.

Wellington, Taipei, Jakarta and Manila were also well down.

But Tokyo edged up 0.1 percent after the Nikkei on Monday saw its highest close in 27 years with the yen at its weakest since November.

Markets in China were closed for a holiday.

London fell 0.3 percent in early trade, while Paris lost 0.6 percent and Frankfurt shed 0.4 percent.

In forex trade the euro faced selling pressure on concerns about Italy’s finances after its populist government agreed a massive spending boost that blew out its budget, while eurozone finance ministers warned Rome to abide by fiscal rules.

High-yielding and emerging market currencies were mostly down as dealers looked for safer bets. The dollar broke 15,000 Indonesian rupiah for the first time since 1998 during the Asian financial crisis, while Mexico’s peso and the South African rand were more than one percent off against the greenback.

South Korea’s won, the Australian dollar and the Russian ruble were also sharply lower.

– Key figures around 0810 GMT –

TokyoNikkei 225: UP 0.1 percent at 24,270.62 (close)

Hong KongHang Seng: DOWN 2.4 percent at 27,126.38 (close)

ShanghaiComposite: Closed for public holiday

LondonFTSE 100: DOWN 0.3 percent at 7,471.30

euro/dollar: DOWN at $1.1533 from $1.1578 at 2020 GMT

Pound/dollar: DOWN at $1.2996 from $1.3037

Dollar/yen: DOWN at 113.80 from 113.96 yen

OilWest Texas Intermediate: UP 34 cents at $75.64 per barrel

OilBrent Crude: UP 30 cents at $85.28 per barrel (new contract)

New YorkDow Jones: UP 0.7 percent at 26,651.21 (close)

https://sg.news.yahoo.com/oil-holds-gains-eyes-100-barrel-asia-markets-024305726–finance.html

 


Category: FinanceAsia

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