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Oil languishes after OPEC fails to deepen supply cuts, Asia stocks retreat

Posted by: Admin | Posted on: May 26th, 2017 | 0 Comments


SINGAPORE Crude prices remained subdued early on Friday after an agreement by OPEC to extend existing supply curbs disappointed many who had hoped for larger cuts.

Asian stocks dropped, turning away from Wall Street’s strong performance overnight.

The Organization of Petroleum Exporting Countries and some non-OPEC producers agreed at a meeting in Vienna on Thursday to extend supply cuts of 1.8 million barrels per day until the end of the first quarter of 2018.While OPEC’s move had been expected, some oil market investors had hoped producers would agree to longer or deeper cuts to drain a global glut of oil. Talk around extending the cuts had driven crude futures higher in recent days, with the confirmation prompting profit-taking.

“This seems like a clear case of buy the rumor, sell the fact, which was touted to be the reaction,” James Woods, global investment analyst at Rivkin Securities in Sydney, wrote in a note.

U.S. crude CLc1 prices were flat at $48.88 early on Friday, after losing 4.8 percent overnight, set to end the week 2.8 percent lower.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS, which closed at a two-year high on Thursday, fell 0.2 percent, shrinking its weekly gain to 1.5 percent.

Japan’s Nikkei .N225 also slipped 0.2 percent, on track for a 1 percent increase for the week.

Overnight on Wall Street, the SP 500 .SPX and the Nasdaq .IXIC closed at record highs after strong earnings reports from retailers.

The strong performance helped lift MSCI’s global stocks index .MIWD00000PUS to a record close overnight.

Sterling fell 0.3 percent on Friday to $1.2906, after a YouGov poll showed Britain’s opposition Labor Party had cut the lead of Prime Minister Theresa┬áMay’s Conservatives to five points less than a fortnight before national elections also weighed on sterling.

Sterling declined 0.3 percent on Thursday after data showed Britain’s economy slowed more than previously thought in the first quarter of this year.

“The UK is now beginning to look like the sick man of Europe,” said Kathleen Brooks, research director with City Index in London.

The dollar pulled back 0.1 percent to 111.68 yen JPY= on Friday, and was set to end the week up 0.2 percent.

The dollar index .DXY, which tracks the greenback against a basket of six major peers, was steady and poised for a 0.1 percent gain in the week.

U.S. unemployment data that showed a tightening labor market was offset by a widening goods trade deficit in April and news of declining inventories, prompting analysts to pare their second-quarter economic growth estimates.

The euro EUR=EBS was flat at $1.121.

Gold XAU= was steady at $1,254 an ounce, poised for a 0.1 percent loss for the week.

(Reporting by Nichola Saminather; Additional reporting by Patrick Graham; Editing by Eric Meijer)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/-MwpXxYg0Hk/us-global-markets-idUSKBN18M02B

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