Oil trades at highest since 2015

Tuesday 09:00 GMT

What you need to know

• Brent extends its rally amid Saudi corruption crackdown
• Saudi stock index falls as investors track purges
• Energy and materials stocks help drive gains across bourses
• Euro and sterling slip as dollar finds support
• Yen faces pressure as Trump’s Asian tour continues

Leading quote

“The ongoing anti-corruption drive in Saudi Arabia might affect sentiment [in the oil market] but is unlikely to impact production,” says Christa Jenni, at Credit Suisse.

“The focus today is likely to be on Opec’s World Oil Outlook and the US Energy Information Administration’s Short-Term Energy Outlook. We stay neutral on commodities and energy at this stage.”

Hot Topic

Brent crude is extending a two-year high above the $64-a-barrel mark. Concerns about the meaning of a widening corruption crackdown in Saudi Arabia have added fresh momentum to a rally.

The international oil benchmark is up 0.5 per cent at $64.56, taking its advance since Friday’s close to almost 4 per cent.

The Saudi purges have reached dozens of princes and business tycoons after “widespread corruption” raised concerns about stability and policymaking in the country, the world’s largest crude exporter.

West Texas Intermediate, the US marker, is steady at $57.33.

There is a rally among oil and resource stocks on equities markets.

The Euro Stoxx oil and gas index is up 1.2 per cent, outrunning a 0.2 per cent advance on the wider Euro Stoxx 600. London’s FTSE 100 is up 0.2 per cent, with Shares in sector heavyweights Royal Dutch Shell and BP up 0.8 per cent apiece.

Australia’s S&P/ASX 200 is up 1 per cent as the energy sector gained 2.6 per cent.

Metals stocks are also higher, as a rally for hard commodities prices continues in China, where iron ore is up a further 2.5 per cent. The Euro Stoxx mining index is up 0.8 per cent.

Saudi Arabia’s Tadawul stock index is down 1 per cent at 6,915.10, as investors keep a wary watch on events in the kingdom.

Equities

Frankfurt’s Xetra Dax 30 is up 0.3 per cent, as is the CAC 40 in Paris.

Tokyo’s Topix is up 1.2 per cent, with energy stocks again leading the gains with a 2.6 per cent advance. The Hang Seng is up 1.4 per cent and the Shanghai Composite is 0.8 per cent higher.

Forex and fixed income

The dollar is finding support after softening over the previous session. The index tracking the US currency against a basket of international peers is up 0.2 per cent at 94.909.

The euro is down 0.2 per cent at $1.1587 and the pound is off 0.1 per cent at $1.3156. Against the euro, the pound is 0.1 per cent stronger at £0.8808.

The yen is 0.4 per cent weaker at ¥114.12 per dollar as US President Donald Trump continues his tour of Asia. Mr Trump criticised Japan’s trade with the US at the start of his visit.

Sovereign bond markets are steady, with yields — which move inversely to prices — on 10-year US Treasuries up 1 basis point at 2.33 per cent, and on 10-year Japan government bonds flat at 0.015 per cent.

For market updates and comment follow us on Twitter @FTMarkets

http://ift.tt/2hiftOL