OIL PRICES AGAINST GROWTH
Wall Street stocks rebounded on Friday on signs the U.S. economy was on track for solid growth with consumer sentiment hitting an 11-year high, while the euro slid further against the dollar a day after Switzerland ditched its currency cap.
Crude prices rallied on the U.S. sentiment report and after the International Energy Agency said lower prices had begun to curb production in some areas, including North America. The IEA said prices might fall further, but "signs are mounting that the tide will turn."
U.S. gasoline prices fell again in December, leading consumer prices to post their biggest decline in six years, while a gauge of underlying inflation was flat. The data could make the Federal Reserve cautious about raising interest rates.
Global equity markets rebounded, with U.S. stocks capping five straight sessions of losses. European shares rose on growing expectations of economic stimulus from the European Central Bank.
Wall Street surged at the close. Major U.S. indexes rose more than 1 percent in what Ken Polcari, director of the NYSE floor division of O'Neil Securities in New York, said had the makings of a relief rally.
"The market has been under complete duress for five or six days, the tone has been very ugly. Today it seems most things have calmed down, so buyers have started to step back in," he said.
The University of Michigan said U.S. consumer sentiment rose in January on employment and income gains, with spending power boosted by sliding gasoline prices.
The "outstanding" report countered fears that tumbling oil prices would curb growth, said Phil Orlando, chief equity strategist at Federated Investors in New York. He said cheaper energy will boost discretionary spending, and added that a disappointing retail sales report this week excluded online sales and gift cards and was skewered by seasonal factors.
"The psychology of the market has been horribly negative for the last couple of weeks," said Orlando. "What turned the market around today was plain and simple: the Michigan number was outstanding."
The day after the euro lost Swiss support, the single currency slid to $1.1461, its weakest since November 2003. It last traded at $1.1567, down 0.52 percent. Against the yen, the dollar was up 1.23 percent at 117.59 yen.
On equity markets, MSCI's all-country world index gained 0.76 percent. The pan-European FTSEurofirst 300 index of leading regional companies closed up 0.99 percent at 1,407.17 points.
Swiss stocks sank again on concerns a stronger franc will hurt Swiss multinationals that depend on exports. The Swiss blue-chip index SMI closed down 6 percent.
Morgan Stanley estimated that 85 percent of Swiss company sales come from abroad.
The Dow Jones industrial average closed up 190.86 points, or 1.1 percent, at 17,511.57. The S&P 500 rose 26.75 points, or 1.34 percent, to 2,019.42 and the Nasdaq Composite added 63.56 points, or 1.39 percent, to 4,634.38.
U.S. Treasuries prices fell after the strong consumer sentiment and tame inflation reports sparked profit-taking on recent gains.
The 10-year U.S. Treasury note fell 15/32 in price, pushing the yield up to 1.8257 percent.
Brent crude futures for March delivery rose $1.90 to settle at $50.17 a barrel. U.S. crude settled up $2.44 at $48.69 a barrel.
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AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.