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Wednesday May 19th, 2021

Oil prices gain as Saudi minister backs output cuts; global stocks mixed

AFP – Global stock markets were mixed on Monday ahead of key US economic data and a European Central Bank meeting, while crude prices gained as the new Saudi oil minister signaled he would defend oil prices.

Major US stock indices finished little changed ahead of key reports on consumer prices and retail sales for August later in the week.

Investors are in “wait and see” mode, said Art Hogan, chief market strategist at National Securities.

“It’s a case of having a two-week winning streak and not much of a rethink on it,” he added.

Recent US data has been mixed, with August jobs growth lagging expectations, but services sector activity growing more quickly than expected, according to reports last week.

European bourses were also mixed, with London falling sharply as the pound rose on official data that showed the British economy grew by 0.3 percent in July, reducing the likelihood of a UK recession this year as Brexit looms large.

“While parliament seems to be falling apart, the economy is holding up reasonably well,” noted Paul Dales, chief UK economist at research consultancy Capital Economics.

“July’s surprisingly strong rise in GDP suggests that it has not fallen into a recession.”

British MPs voted to demand Prime Minister Boris Johnson release confidential documents relating to Britain’s EU exit, during a final day of defiance before he suspends their session until just weeks before Brexit.

Elsewhere, the euro wavered as dealers mulled speculation that the European Central Bank could decide this week to loosen monetary policy.

– Oil rallies –

Oil prices advanced as newly-installed energy minister Prince Abdulaziz bin Salman, said that oil production cuts would benefit all exporting nations, in an indication he will support further reductions to address an oversupplied market and sagging prices.

In his first comments since being appointed by his father King Salman on Sunday, the minister signaled no major change in approach in Saudi Arabia, the de facto OPEC leader which pumps about a third of the cartel’s oil.

“The pillars of our oil policy are pre-determined and will not change,” he told Saudi broadcaster Al-Arabiya.

The appointment of Prince Abdulaziz, half-brother to de facto ruler Crown Prince Mohammed bin Salman, marks the first time a royal family member has been put in charge of the all-important energy ministry.

He replaces veteran official Khalid al-Falih as the world’s top crude exporter accelerates preparations for a much-anticipated stock listing of state-owned oil giant Aramco, expected to be the world’s biggest.

– Key figures around 2100 GMT –

New York – Dow: UP 0.1 percent at 26,835.51 (close)

New York – S&P 500: FLAT at 2,978.43 (close)

New York – Nasdaq: DOWN 0.2 percent at 8,087.44 (close)

London – FTSE 100: DOWN 0.6 percent at 7,225.81 (close)

Frankfurt – DAX 30: UP 0.3 percent at 12,226.10 (close)

Paris – CAC 40: DOWN 0.3 percent at 5,588.97 (close)

EURO STOXX 50: FLAT at 3,495.02 (close)

Tokyo – Nikkei 225: UP 0.6 percent at 21,318.42 (close)

Hong Kong – Hang Seng: FLAT at 26,681.40 (close)

Shanghai – Composite: UP 0.8 percent at 3,024.74 (close)

Pound/dollar: UP at $1.2342 from $1.2283 at 2100 GMT

Euro/pound: DOWN at 89.45 pence from 89.79 pence

Euro/dollar: UP at $1.1046 from $1.1029

Dollar/yen: UP at 107.23 yen from 106.92 yen

Brent North Sea crude: UP $1.02 at $62.52 per barrel

West Texas Intermediate: UP $1.33 at $57.85 per barrel

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