News

Oil slumps below $80 as stocks wobble

By AFP

November 9, 2023 09:45 AM


Representational image

Brent crude fell below $80 per barrel for the first time since July on Wednesday, while stocks struggled, as concerns about the economic outlook weighed on investors.

Brent crude, the main international contract, dropped more than two percent to hit $79.54, amid fears about global demand.

Meanwhile the main US contract, WTI, slumped as far as $75.33 per barrel, also hitting its lowest level since July.

The slide comes as weaker economic expectations continue to weigh on the outlook, said market analyst Craig Erlam at OANDA.

Crude had already plunged about four percent the previous day on news that China's exports fell at a faster pace than predicted in October. That stoked fresh concern over its appetite for energy.

"The focus is clearly shifting from undersupply to weak demand and central banks insisting that rates must remain high could further exacerbate that," Erlam added.

The drop in oil prices provided some support to stocks, but they still struggled.

Wall Street's main indices ended the day without major movement, with the Dow edging down 0.1 percent, while the S&P 500 and Nasdaq both crept up 0.1 percent.

"The market had a significant bounce last week. This is a week where we are looking for new catalysts to build on that gain or to retrace some of that gain, and we really had neither," said Art Hogan of B Riley Wealth Management.

Although lower energy prices and retreating yields are both positive developments, neither were enough of a catalyst to move markets significantly, he added.

Wall Street stocks surged last week after the US central bank hinted at no more increases in interest rates and data showed that the economy is on course to slow but not contract.

But traders have nevertheless been concerned about growth prospects, including in the United States, with a drop in market rates being something of a double-edged sword.

While the lower borrowing costs should be a boost for business, Patrick O'Hare of Briefing.com said some investors seem to be worried the drop in market interest rates is more an indication of the degraded business outlook.

"This disconnect likely helps explain some of the churning taking place right now, as market participants struggle to reconcile if interest rates are going down entirely for the right reasons," said O'Hare.

In Europe, London ended the day marginally lower, held back by natural resource and energy stocks.

Both Frankfurt and Paris closed with modest gains.

Asian stock markets ended mixed.

- Key figures around 2115 GMT -

New York - Dow: DOWN 0.1 percent at 34,112.80 (close)

New York - S&P 500: UP 0.1 percent at 4,382.80 (close)

New York - Nasdaq: UP 0.1 percent at 13,650.41 (close)

London - FTSE 100: DOWN 0.1 percent at 7,401.72 (close)

Paris - CAC 40: UP 0.7 percent at 7,034.16 (close)

Frankfurt - DAX: UP 0.5 percent at 15,229.60 (close)

EURO STOXX 50: UP 0.6 percent at 4,178.49 (close)

Tokyo - Nikkei 225: DOWN 0.3 percent at 32,166.48 (close)

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 17,568.46 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,052.37 (close)

Euro/dollar: UP at $1.0711 from $1.0700 on Tuesday

Pound/dollar: DOWN at $1.2286 from $1.2300

Dollar/yen: UP at 151.00 yen from 150.37 yen

Euro/pound: UP at 87.16 pence from 86.99 pence

Brent North Sea crude: DOWN 2.5 percent at $79.54 per barrel

West Texas Intermediate: DOWN 2.6 percent at $75.33 per barrel


AFP


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