Last Update 20:27
Monday, 19 April 2021

Oil price soars to highest level in years on Mideast woes

AFP , Thursday 19 Apr 2018
Views: 3099
Views: 3099

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 takeover move.

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.

"Saudi Arabia still calls the shots on global oil markets, and it is increasingly obvious the Saudis are comfortable with oil at $80 or more," said Interactive Investor analyst Lee Wild.

"Add a drop in weekly US oil reserves to the mix and the only way for crude prices is up."

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 edged 0.04 percent higher despite news of sliding March retail sales.

Wall Street opened lower, with the Dow dropping 0.2 percent in the first minute of trading.

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".

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.

The positive trading environment is a far cry from the unease felt at the start of the week after US-led strikes on Syrian targets -- in response to an alleged chemical attack -- sparked worries of a confrontation with Russia, which is an ally of the Damascus regime.

While reports have suggested Russian President Vladimir Putin is looking to ease tensions as he faces fresh sanctions, on Thursday Russia became the third powerful member of the World Trade Organization to challenge US tariffs on steel and aluminium, following China and the European Union.

China's announcement of a timetable to remove restrictions on foreign ownership in its car market, the world's biggest, also lifted optimism that a simmering trade war with the United States can be avoided.

Tough rules on doing business in the country's auto sector had been a major source of anger for Trump, who has already threatened tariffs on billions of dollars of Chinese imports in recent weeks as part of his "America First" protectionist agenda.


New York - Dow: DOWN 0.2 percent at 24,705.67 points

London - FTSE 100: UP 0.04 percent at 7,320.12

Frankfurt - DAX 30: DOWN 0.3 percent at 12,557.12

Paris - CAC 40: UP 0.1 percent at 5,385.70

EURO STOXX 50: DOWN 0.2 percent at 3,483.92

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: UP at $1.2380 from $1.2374 at 2100 GMT

Dollar/yen: UP at 107.38 yen from 107.23

Pound/dollar: DOWN at $1.4233 from $1.4203

Oil - Brent North Sea: UP 81 cents at $74.29 per barrel

Oil - West Texas Intermediate: UP 49 cents at $68.96

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