Oil Prices rise this morning more than 5% after speculations of curb output deal agreement among OPEC members. The Algerian oil minister said earlier that he is 99 per cent certain OPEC members will reach a deal today. His comment spiked oil prices.
This morning, markets in the Asian and Pacific Rim were mixed in trade as energy stocks were under selling pressure thanks to an overnight decline in oil prices. Investors are eyeing today’s OPEC cartel meeting in Vienna for an accord to cap production.
In Japan, the benchmark Nikkei 225 closed flat while stocks on the South Korean Kospi Composite Index gained 0.26 percent. In the Down Under, the S&P ASX 200 lost 0.31 percent. Miners led the losses on the Australian exchange and material sub-index dropped 2.3 percent. The energy sub-sector tracked oil prices lower and shed 1.45 percent.
In Hong Kong, the Hang Seng Index was up 0.08 percent and mainland Chinese markets were a tad lower. The Shanghai Composite was down 0.2 percent and the Shenzhen Composite lost 0.1 percent this morning.
Overnight, the price of the black gold fell almost four percent as a fresh wave of pessimism over any hope that OPEC would reach a deal to curb the production of crude oil diminished. Today’s morning, oil prices are trading positively . Crude oil is trading 1.78% up while Brent oil is trading 1.80% up. There are oil ministers from the 14 nations that make up the cartel in Vienna and there are signs of cracks in any deal. They are scheduled to announce any deal later in the day, if there is one.
This put pressure on energy plays throughout the Asian and Pacific Rim. Shares of Santos fell over one percent. Oil Search lost 1.6 percent and Woodside Petroleum she over 2.3 percent. In Japan, Fuji Oil lost over 1.3 percent and in South Korea, S-Oil lost nearly 1.29 percent. Hong Kong listed oil plays were also mostly lower.
Turning to the broader Forex market, this morning, the Dollar pulled back again. This comes despite an upward revision to the third quarter gross domestic product (Q3 GDP) for the United States and a stronger-than-expected consumer confidence report. Profit seekers are still skimming a little off the top as the Dollar rally does not appear to be quite finished yet.
The second reading for the US Q3 GDP came in at an annual rate of 3.2 percent. This was an upward revision from the original 2.9 percent. Consumer confidence came in at 101.1, above expectations.