Oil is taking a hit after US inventories gain while Putin says prices are 'absolutely fine'
- Oil prices tumble yet again ahead of an OPEC meeting on December 6. Vladimir Putin said current prices are "absolutely fine." WTI traded below $50 for the first time in over a year.
- Federal Reserve Chairman Jerome Powell said on Wednesday that rates are "just below" a neutral level, taken by investors as a sign that the rate hike agenda was nearing its end. That helped lift European shares on Thursday.
- US treasury yields and the dollar fell ahead of a crucial G20 summit in Argentina Friday.
Brent Crude dropped back below $60 a barrel and is currently trading at $58.14, down 1.6%, after data showed US inventories continued to grow, while Russia indicated it has limited interest in cutting supply. Russian President Vladimir Putin said current prices are "absolutely fine" ahead of an important OPEC meeting December 6. WTI, down 1.1%, traded below $50 for the first time in over a year.
Falling oil prices could prompt world leaders to agree on production policy at G-20 summit, analysts told CNBC. The plunge in prices has added pressure on the OPEC alliance to execute another round of supply cuts.Elsewhere in markets, Federal Reserve Chairman Jerome Powell's comments on interest rates gave a lift to US stocks on Wednesday and to European equity indexes on Thursday. He said rates are "just below" a neutral level, taken by investors as a sign that the rate hike agenda was nearing its end.
Asian stocks broadly rose on the news despite investor jitters ahead of an important G20 summit Friday. Japan's Nikkei finished up 0.4%, following US gains on Wednesday, though the Shanghai Composite Index was an outlier closing down 1%. MCSI's broad Asian index, excluding Japan, rose 0.6% and is currently up 0.2%.
The Euro Stoxx 600 was up 0.6% as of 10.00 a.m in London (5 a.m EST). France's CAC is up 0.7% and Germany's Dax is is trading 0.5% higher.
Powell's speech Wednesday also noted that there is "a great deal to like" about the US economy, and added that the outlook remains solid. His remarks sent the S&P 500 up 2.3% while the Nasdaq rose 3% at the close Wednesday. US index futures are all trading at least 0.3% lower on Thursday.
November's losses were erased on the Dow Jones Industrial Average - which climbed 600 points Wednesday - with investors expectant that Powell's comments suggested a slowing or stopping of the Fed's interest rate hikes.
A Federal Reserve report out earlier Wednesday showed some American businesses have the most debt in two decades. Still, officials "see no major asset class where valuations appear far in excess of standard benchmarks," Powell said in his speech.US two-year treasury yields slipped to 2.813%.