Optimism OPEC ministers in Vienna will salvage a deal to cut production reverberated through the financial markets, spurring oil’s biggest gain in two weeks and sending stocks of energy producers and currencies of commodity-exporting nations higher.
Bijan Namdar Zanganeh on Nov. 30.
Photographer: Akos Stiller/Bloomberg
“Oil prices are driving today’s gains -- anything other than a production cut and we’ll head south,” said Stuart Samuels, a London-based sales trader at Oppenheimer Europe. “Markets tracking the move in crude near-term is causing some volatility. I’d be inclined to take some profits.”
Crude prices have swung between gains and losses this week before the make-or-break meeting and set the tone for global macro trades as investors weighed prospects for a deal that was assigned market odds of just 30 percent, according to Goldman Sachs Group Inc. Iraq Oil Minister Jabbar al-Luaibi said OPEC ministers were unanimous in their support for an output cut and Noureddine Boutarfa, Algeria’s Minister of Energy, said the nation is ready to reduce production. Russia may join the deal with a more flexible position, according to a person familiar with the delegation’s thinking.
Commodities
- WTI crude futures surged 6.5 percent to $48.17 a barrel as of 11:27 a.m. in London, after tumbling 3.9 percent on Tuesday.
- Iran’s oil minister said there were acceptable proposals on the table, but his country would not countenance a freeze or cut based on current levels. Saudi Arabia has said it is ready to reject an agreement unless all OPEC members -- excluding Libya and Nigeria -- take part, people familiar with the kingdom’s position said.
- Base metals rebounded in London, with zinc climbing 1.5 percent and copper gaining 1.2 percent. The London Metal Exchange Index tumbled 3.4 percent on Tuesday, its biggest one-day retreat in more than a year.
Stocks
Watch Next: Markets Await OPEC Meeting Outcome
- The Stoxx Europe 600 Index rose 0.1 percent, keeping it on track for its best month in four.
- Shares of oil producers headed for a one-month high, bouncing back from a three-day slide. BP, Shell and Eni SpA climbed at least 2.5 percent.
- Linde AG led chemical companies higher in Europe, gaining 6.6 percent after saying it’s reviewing a revised merger proposal from Praxair Inc.
- Royal Bank of Scotland declined as much as 5 percent in London trading, reaching its lowest since Nov. 9.
- Futures on the S&P 500 Index were up 0.1 percent.
Currencies
- The dollar advanced 0.7 percent to 113.12 yen. The greenback has climbed 7.9 percent against its Japanese peer since Oct. 31, headed for its biggest gain since February 2009.
- Bloomberg’s dollar gauge advanced 0.1 percent, pushing its gain this month to 3.5 percent, the most since May.
- Private payrolls increased by 170,000 this month, after 147,000 gain in October, data from the ADP Research Institute in Roseland, New Jersey, will show Wednesday, according to a Bloomberg survey of economists.
- Russia’s ruble gained 0.9 percent versus its U.S. counterpart, the biggest increase among 31 major currencies tracked by Bloomberg. Norway’s krone was the next best with a 0.6 percent appreciation while the Mexican peso rose 0.3 percent.
Bonds
- Treasury 10-year yields rose four basis points to 2.33 percent, up from 1.83 percent on Oct. 31. The yield is on course of the biggest monthly since December 2009.
- German bund yields declined one basis point to 0.21 percent
