Oil's 4pc tumble weighs on energy shares, banks rally

Pipelines run to Enbridge Inc's crude oil storage tanks at their tank farm in Cushing, Oklahoma March 24, 2016. — Reuters pic
Pipelines run to Enbridge Inc’s crude oil storage tanks at their tank farm in Cushing, Oklahoma March 24, 2016. — Reuters pic

NEW YORK, July 17 — The price of oil tumbled more than 4 per cent yesterday, putting pressure on energy shares and keeping global stock markets in check, although financial shares rallied after upbeat news from Bank of and Deutsche Bank.

Oil slumped as Libyan ports reopened and traders eyed potential supply increases by Russia and other producers.

US crude settled down 4.15 per cent at US$68.06 (RM275.61) a barrel, while settled at US$71.84, down 4.63 per cent, and touched a three-month low.

Concerns over ’s second-quarter economic growth also weighed on oil prices. The country’s economy expanded at a slower pace as Beijing’s efforts to contain debt hurt activity, while June factory output growth weakened to a two-year low.

“The GDP missing a little bit psychologically was a warning sign that China is doing OK now, but not quite as strong as expected,” said Phil Flynn, analyst at Price Futures Group in Chicago.

’s main indexes ended little changed following strong weeks as investors geared up for a big week of corporate earnings and awaited commentary on the impact of US trade disputes with China and its other trading partners.

“It looks as though we’re just taking a bit of a break after a good run last week,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

The Dow Jones Industrial Average rose 44.95 points, or 0.18 per cent, to 25,064.36, the S&P 500 lost 2.88 points, or 0.10 per cent, to 2,798.43 and the Nasdaq Composite dropped 20.26 points, or 0.26 per cent, to 7,805.72.

Major energy stocks such as Exxon Mobil, Chevron and BP weighed on key indexes.

Financials in the United States and Europe were higher following Bank of America’s better-than-expected quarterly profit and Deutsche Bank’s upbeat earnings preview.

Overall in Europe, the pan-European FTSEurofirst 300 index lost 0.34 per cent.

MSCI’s gauge of stocks across the globe shed 0.13 per cent.

Markets looked ahead to Federal Reserve Chairman Jerome Powell’s semiannual testimony on the US economy and monetary policy before the US Senate Committee today.

The fell after posting its largest weekly gain in a month, as investors pared long bets on the greenback.

The US dollar index fell 0.28 per cent, with the euro up 0.23 per cent to US$1.1712.

The rouble held gains after a meeting between Russian President Vladimir Putin and US President Donald Trump helped offset the negative impact from the drop in oil prices.

US Treasury yields increased, with the two-year yield hitting a near decade peak, as domestic retail sales recorded growth for a fifth straight month in June, supporting the view of solid economic growth in the second quarter.

Benchmark 10-year notes last fell 7/32 in price to yield 2.8545 per cent, from 2.831 per cent late on Friday. — Reuters

Source: The Malay Mail Online

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