18.8 C
New York
Friday, October 22, 2021

Oil price soars to highest level in years on Mideast tensions

Oil price soars to highest level in years on Mideast tensions

LONDON: Oil surged Thursday close to 3.5-year peaks on simmering Mideast tensions and keen US demand, while London stocks rose with drugmaker Shire boosted by a possible takeover battle.

World oil prices extended Wednesday’s gains on the back of data showing a drop in US stockpiles — indicating improved demand — and expectations that a Russia-OPEC output cap deal will be kept in place.

The market was also propelled after OPEC kingpin reportedly stated it wanted crude prices to top $80 per barrel as it prepares for a gigantic listing of part of its state oil company. Tensions in the oil-rich Middle East also kept prices elevated.

“WTI and Brent Crude have hit fresh 41-month highs after Saudi Arabia stated they would be happy for oil to reach $80 or $100,” said market analyst David Madden at CMC Markets UK.

As OPEC members met Thursday in Saudi Arabia, the cartel’s largest producer was seen as favouring strengthening the partnership with Russia that has successfully limited production to mop up the glut that had sent oil prices plunging under $30 per barrel in early 2016.

“When it comes to the oil cartel, the Saudis usually get what they want,” said Madden.

Oil surged to summits last seen in November 2014, with London Brent striking $74.74 per barrel and New York crude touching $69.56.

European equity markets meanwhile diverged amid lingering fears over Syria and a possible China-US trade war, but London moved 0.2 percent higher despite news of sliding March retail sales.

– Shire shares leap –

The British capital’s benchmark FTSE 100 index was given an early shot in the arm from media reports, later confirmed, that Japan’s Takeda Pharmaceuticals was making a takeover move on Shire.

Shire, which is based in Ireland and listed on the London stock market, saw its share price rocket more than 10 percent higher.

It gave up much of those gains after Takeda confirmed it had made a takeover bid worth £42 billion ($60 billion), but that Shire had rejected the offer.

Shire said it had rejected three offers from Takeda, and was still in discussions with the firm about “whether a further, more attractive, proposal may be forthcoming”.

Shire shares shot higher once when Botox maker Allergan said it was considering making an offer as well. They closed the day 5.9 percent higher.

Allergan shares slumped 6.4 percent in New York.

Wall Street moved lower, with the Dow down 0.2 percent in late morning trading, as consumer goods companies tumbled after Procter & Gamble cited “difficult” conditions facing the sector.

Dow member P&G reported essentially flat earnings on slightly higher sales, but executives said the push by retailers to keep prices low was weighing on business. Chief Executive David Taylor vowed to “change at an even faster rate.”

P&G shares fell 2.5 percent, while Kimberly-Clark and Colgate-Palmolive both dropped more than two percent. Clorox sank 4.7 percent.

Asian markets enjoyed another day of gains Thursday as the region’s energy firms also tracked a surge in oil prices.

Fresh hopes that Donald Trump and North Korea’s leader Kim Jong Un will hold a historic summit within months also provided some much-needed optimism.

– Key figures around 1530 GMT –

New York – Dow: DOWN 0.2 percent at 24,703.85 points

London – FTSE 100: UP 0.2 percent at 7,328.92 (close)

Frankfurt – DAX 30: DOWN 0.2 percent at 12,567.42 (close)

Paris – CAC 40: UP 0.2 percent at 5,391.64 (close)

EURO STOXX 50: DOWN 0.1 percent at 3,487.10

Tokyo – Nikkei 225: UP 0.2 percent at 22,191.18 (close)

Hong Kong – Hang Seng: UP 1.4 percent at 30,708.44 (close)

Shanghai – Composite: UP 0.8 percent at 3,117.38 (close)

Euro/dollar: DOWN at $1.2352 from $1.2374 at 2100 GMT

Dollar/yen: UP at 107.42 yen from 107.23

Pound/dollar: UP at $1.4204 from $1.4203

Oil – Brent North Sea: UP 84 cents at $74.32 per barrel

Oil – West Texas Intermediate: UP 51 cents at $68.98

Copyright AFP (Agence France-Press), 2018

Source: Brecorder

Related Articles

Stay Connected

- Advertisement -

Latest Articles

Popular Articles