Oil holds 2-year high with Brent crude over $60

Monday 07:30 GMT

What you need to know

• Oil touches highest level since July 2015 over $60
• European bourses set to fall and Asia retreats
• Dollar rallies against its Australian and NZ counterparts on outlook for US rates

Leading quote

”Fundamental conditions in the oil market continue to improve,” says Jason Gammel at Jefferies.

“Demand growth has been strong; Opec conformity with production targets has been good and an extension seems likely; and we believe that US production growth could under-deliver in 2018.”

Hot topic

Brent crude has touched its highest level in over two years and is holding the $60 a barrel mark for the first time since mid-2015.

Confirmation that Saudi Arabia is prepared to back the extension of supply cuts have helped the international oil marker hold just above $60 for the first time since 2015.

Brent is up 0.2 per cent at $60.57, while West Texas Intermediate, the US benchmark, is up 0.2 per cent at $54.01.

Equities

Equities are starting the week under pressure as investors look reluctant to extend their exposure to risk after a series of notable highs.

According to opening calls from London Capital, European equities will slip in opening trade, following a lacklustre showing in Asia.

London’s FTSE 100 is called down 25 points, with Frankfurt’s Xetra Dax 30 expected to fall by 9 points.

Japan’s Nikkei 225 equity index touched its highest point in 21 years in morning trading before reversing to be down 0.1 per cent, while the benchmark Topix index, which focuses on market capitalisation, was also off 0.1 per cent.

Hong Kong’s Hang Seng index was flat, failing to build on last week’s gains. In China, the Shenzhen and Shanghai Composite indices were down 1.2 per cent and 0.8 per cent, respectively.

The Kospi Composite in Seoul was up 0.3 per cent but shares in Daewoo Shipbuilding & Marine Engineering shed almost two-thirds of their value as stock in the world’s second-largest shipbuilder resumed trading for the first time in 15 months.

Taiwan-listed Apple suppliers bucked the trend, climbing as demand for the iPhone X exceeded supply when pre-orders opened late last week. Among the biggest winners were Largan Precision, up 4 per cent, and Catcher Technology, up 3.6 per cent.

Australia’s S&P/ASX 200 index was up 0.4 per cent as the energy segment rose 1.6 per cent, buoyed by higher oil prices.

Forex

The New Zealand dollar resumed its decline, dropping 0.5 per cent to $0.6846 against its US counterpart, with markets appearing uneasy as the new government started its first full week in office.

The US dollar index, which measures the greenback against a basket of peers, was down 0.2 per cent, following some volatility last week after reports that President Donald Trump was leaning towards nominating Jerome Powell as the next head of the Federal Reserve.

The Japanese yen firmed 0.1 per cent against the US currency to ¥113.56 while the Australian dollar was unmoved at $0.7674.

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