Oil soars on OPEC hopes, dollar renews its surge

Dhaka,  Sat,  03 December 2016
Published : 30 Nov 2016, 21:26:53

Oil soars on OPEC hopes, dollar renews its surge

London, Nov 30 (Reuters): Oil jumped more than 6 per cent and the dollar, US bond yields and stocks all pushed higher on Wednesday as signals from OPEC suggested the group was closing in on a deal to cut production.

Combined with fresh concern about China's banking system, a stress test for British banks and a raft of euro zone data, the OPEC meeting topped off a wild November for financial markets that has been dominated by Donald Trump's victory in the US presidential election.

Brent oil CLc1 was still rising, having surged back toward $49 a barrel after OPEC's secretary general said a deal would be reached as he headed into a meeting of the group in Vienna.

Top oil producer Saudi Arabia said a deal was close despite some loose ends. Iran, which is considered crucial to a breakthrough because its output has been rising after western sanctions were lifted, said it was also "optimistic".

"I think we are looking at a very positive meeting," added UAE Energy Minister Suhail bin Mohammed al-Mazroui, who was echoed by counterparts from Angola, Algeria and Nigeria.

A possible rise in oil prices has also been feeding expectations for a rebound in global inflation. Those expectations have been gathering momentum since Trump promised $1 trillion of new spending on infrastructure.

It has meant an electrifying run for the dollar, which was up at 1.0645 per euro EUR= and 113.04 yen JPY= by 1020 GMT (5:20 a.m. ET) as it headed for its strongest month against the Japanese currency in seven years.

US Treasury yields US10YT=RR -- the benchmark for global borrowing costs -- were also rising after a two-day pause. They hovered just under 2.33 per cent, having started November at just over 1.8 per cent.

"Dollar strength has mainly been driven by expectations, so these can only carry you so far," Commerzbank currency strategist Esther Reichelt said.
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