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Crude Rises on OPEC Deal Optimism; Chinese Data Weighs on Stocks

Posted by Chris Advincula on Oct 19, 2016 8:08:09 AM


(Oct 19 Bloomberg) Oil rose for a second day on signs the world's largest producers will honor a deal to pare a surplus, boosting currencies of exporters including the ruble, while Chinese economic data damped demand for equities.

West Texas Intermediate crude climbed the most in more than a week after industry data showed U.S. stockpiles declined and Saudi Arabia's Minister of Energy and Industry Khalid Al-Falih said many nations are willing to join OPEC in cutting production. Stocks in Hong Kong swung to a loss and the Australian dollar temporarily erased gains after an unexpected slowdown in China's industrial output cast a cloud over gross domestic product figures that matched analyst estimates. Saudi Arabia was said to plan to raise as much as $17.5 billion in the biggest bond sale ever from an emerging market nation.

Crude has gained 18 percent in the past month, prompting concern that inflation will accelerate around the world and bolstering the case for the Federal Reserve to make its first interest-rate hike since December. Reports Tuesday showed the cost of living in the U.S. rose at the fastest pace in five months, while in the U.K.. a weaker pound has also helped push the price of goods higher. Longer-maturity bonds are the victims, with Treasury 30-year bonds tumbling more than 3.5 percent in October.

"Oil has rallied quite strongly over the past month -- it's not only due to OPEC," Jens Naervig Pedersen, an analyst at Danske Bank A/S, said by phone. "The market is still figuring out whether there is a more persistent downtrend" in U.S. stockpiles, he said.

Click on the link below to see the full story from Bloomberg: (by James Regan and Kelly Gilblom)

Crude Rises on OPEC Deal Optimism; Chinese Data Weighs on Stocks





Topics: commodities, Stocks, china, crude oil, West Texas Intermediate, China Data, OPEC


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