Oil prices rose strongly on Wednesday in London, recovering from the losses the day before as OPEC held a virtual meeting.
The group convened at 1 p.m. GMT to shed some light on the possible impact on fuel demand while the globe examines the potential negative consequences caused by the Omicron strain.
Crude oil futures (CZ = F) rose 4.5% in early London trading, although remained below $70 (£52) per barrel, trading near $68.53. By the end of the day, they were up 3.6%.
Brent Crude (BZ=F) futures contracts climbed roughly 3.8% at the start of the day.
The conference preceded the next round of meetings with OPEC and its partners on Thursday, at which plans for oil production in the next months will be finalized.
According to Reuters, some experts believe Thursday's meeting to halt plans to add 400,000 BPD of oil production in January because of Omicron.
At the same time, equities in Europe were at the forefront after a relatively good Asian session. By the closing, the FTSE 100 (FTSE) had risen 1.6%. The DAX (GDAXI) rose 2.7%, while the CAC (FCHI) rose 2.6%.
The increase came after the publication of PMIs in the manufacturing sector from Markit, which outperformed forecasts in different European countries.
As Russ Mould from AJ Bell said, there will be some time when the market will become more desperate to figure out how aggressive Omicron can be and whether it will evade existing vaccines.
The final answer will have to wait no earlier than mid-December, and in the meantime, stock markets can react aggressively to signals in both directions.
Markets got a shock on Tuesday when Federal Reserve Chairman Jerome Powell stated that the central bank's bond-buying cuts might end earlier than planned. He also dropped the word "transitory" in reference to inflation— steps that might clear an early interest rate hike. U.S. market futures continued to rise towards the close in London. The S&P 500 (^GSPC) began 1% higher and traded 1.8% higher towards the London close. The Dow (DJI) gained 1.4%, while the Nasdaq (IXIC) gained 1.6%.
As Marios Hadjikyriacos, senior investment analyst at XM, pointed out, the market is largely held up by its generals - a small group of tech titans. Recently, there has been a definite shift toward quality, with unproductive 'growth' businesses and small-cap companies being wiped out while titans like Apple continue to push ahead, bearing whole indexes on their shoulders.
In Asia, equities rose overnight. The Hang Seng (HSI) gained 0.8%, while the SSE Composite (000001.SS) gained 0.4%. Japan’s Nikkei (N225) gained 0.4% as well.
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