Firmer crude price lifts global stocks, hurts U.S. dollar
Commodity-linked stocks and world currencies got a lift on Monday from a surge in crude oil prices after major producers Saudi Arabia and Russia said they would extend oil supply cuts into 2018.
Energy ministers from the world’s top two oil producers said cuts, which were set to expire next month, should continue until March, longer than an optional six-month extension specified in the deal.
“When the two biggest oil producers of the world reach a consensus on the extension of a supply cut, the market will listen,” Tamas Varga, analyst at oil broker PVM, said in a report.
“Rhetoric is doing its job but this must be backing by action in less than two weeks’ time.”
The Organization of the Petroleum Exporting Countries meets in Vienna on May 25 to consider the extension.
U.S. crude rose 2.72 percent to $49.14 per barrel and Brent was last at $52.09, up 2.46 percent on the day.
The news from the energy sector more than offset concern over the weekend after a successful missile test by North Korea and a cyber attack that affected computers in more than 150 countries.
The global “ransomware” cyber attack disrupted factories, hospitals, shops and schools, but spurred investors on Monday to buy stocks set to benefit from higher cyber security spending by firms and government agencies.
An exchange-traded fund of cyber security shares across the globe hit a near two-year high and was last up 3.3 percent at $30.74.
U.S. cyber stocks jumps, but the largest advancing sector on Wall Street is energy as shares tracks oil prices higher. The benchmark S&P 500 index hit a record high.
The Dow Jones Industrial Average rose 72.73 points, or 0.35 percent, to 20,969.34, the S&P 500 gained 10.67 points, or 0.45 percent, to 2,401.57 and the Nasdaq Compositeadded 23.24 points, or 0.38 percent, to 6,144.47.
The pan-European FTSEurofirst 300 index rose 0.01 percent and MSCI’s gauge of stocks across the globe gained 0.50 percent.
Emerging market stocks rose 0.90 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.7 percent higher, while Japan’s Nikkei lost 0.07 percent.