Gold steady as Asian stocks slip after oil slump
- Author: Zachary Reyes May 30, 2017,
May 30, 2017, 3:52
U.S. West Texas Intermediate (WTI) crude futures settled at $49.80 a barrel, gaining 90 cents or 1.8 per cent, after hitting an intra-day low at $48.18.
Angola and Nigeria were Africa's top oil producers before the renewed militancy in Niger Delta, which brought the country's production down to as low as one million barrels per day, thereby forfeiting the coveted position to Angola. The deal was widely expected by analysts, but disappointed investors who were hoping for a longer extension.
Overnight on Wall Street, the S&P 500 .SPX and the Nasdaq .IXIC closed at record highs after strong earnings reports from retailers.
On the other hand, energy stocks moved substantially lower amid a steep drop by the price of crude oil.
Ann-Louise Hittle, vice president at energy consultancy Wood Mackenzie said that the "decision in Vienna sends a signal of continued support for oil prices from OPEC which helps U.S. onshore drillers make plans" to further increase their production.
ASIA'S DAY: The Nikkei 225 stock index in Tokyo climbed 0.4 percent to close at 19,813.13 and Hong Kong's Hang Seng rallied 0.8 percent to 25,630.78.
In currency trading, the dollar pulled back 0.3 percent to 111.485 yen on Friday, but was set to end the week up 0.25 percent. South Korea's Kospi jumped 1 percent to 2,342.93 while the Shanghai Composite index gained 1.4 percent to 3,107.83.
Asian shares also fell, while US stock futures slipped. The benchmark S&P/ASX 200 Index declined 37.96 points or 0.66 percent to settle at 5,751.66, and the broader All Ordinaries Index lost 36.70 points or 0.63 percent to finish at 5,792.10. It was last down 1.18 percent at $1.2785. The euro edged up to $1.1229 from $1.1119.
In stock-specific action, energy firms have taken a hit after crude prices fell nearly 5 percent the previous day after the OPEC disappointment.
Gold XAU= was steady at $1,254 an ounce, poised for a 0.1 percent loss for the week.
While skeptics may argue that compliance did little to counter rampant production from rogue OPEC members for the first six months of the cutback agreement and that it's problematic that modest Chinese growth demand will compensate for the huge gains continuing to be made by US shale, Schenker is hardly alone in his upbeat analysis.
Ministers from the participating countries said they would be amenable to changing the deal to help juice the market rebalancing if the fundamentals turn against them, but have left unclear how this may happen. Investors will also get a look at durable goods order data for April, the University of Michigan's consumer confidence snapshot and the Baker Hughes oil rig count.