Asian markets track US, Europe rally as oil soars
A jump in US crude inventories raised hopes that a sell-off in the commodity, which has seen the Brent contract plumb 11-year lows, may be nearing an end
AFP
AFP, HONG KONG: Energy firms climbed in Asian trade yesterday after a surge in oil prices sent US and European markets flying ahead of the Christmas break.
A jump in US crude inventories raised hopes that a sell-off in the commodity, which has seen the Brent contract plumb 11-year lows, may be nearing an end.
Adding to the upbeat tone on trading floors was another round of economic data from Washington reinforcing the view that the worlds number one economy is in rude health.
Yesterdays gains were underpinned by a third straight rise in oil prices after the US Department of Energy said stockpiles tumbled in the week ending December 18, while imports fell about 13 per cent week on week.
US benchmark West Texas Intermediate climbed 0.6 per cent Thursday and Brent gained 0.8 per cent, each extending gains of more than 3.5 per cent Wednesday.
WTI has also been supported by US lawmakers decision last week to lift a 40-year ban on crude exports, leading to hopes of a fall in supplies at home.
The news lit a fire under energy firms in Europe and the United States, with big-name firms including Anglo American, Glencore, ExxonMobile and Chevron all surging.
That in turn led to sharp gains on stock markets in Frankfurt, Paris, London and New York.
In Asia Sydney-listed BHP Billiton soared 5.3 per cent and Rio Tinto more than four per cent, while Inpex in Tokyo climbed two per cent and CNOOC in Hong Kong added three per cent.
Among regional markets Hong Kong jumped 0.4 per cent by the close and Sydney rallied 1.3 per cent.
The two markets saw just half-day trading ahead of the Christmas break. There were also gains for Singapore, Wellington and Taipei.
However, Shanghai shed 0.7 per cent and Tokyo gave up early advances to end 0.5 per cent lower on profit-taking following recent rallies.
Equity markets look keen to have a good Christmas break and deal with the hangover of ongoing systemic issues in the new year, said Angus Nicholson, a Melbourne-based market analyst at IG, told Bloomberg News.
US personal income was yet another data point that further underlines the improving employment situation.
However, he warned: The bounce in commodity stocks is only ephemeral; the ongoing issues for these industries are far from solved.
Crude prices have slumped more than 60 per cent from levels above $100 in summer 2014 owing to scant demand, a global economic malaiseparticularly in Chinaa supply glut and surging output.
