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Oil dips after hitting $50 per barrel; U.S. stocks steady

Oil dips after hitting $50 per barrel; U.S. stocks steady

NEW YORK: Oil prices eased on Thursday after topping $50 (34 pounds) a barrel for the first time in about seven months, while US stocks ended near flat after two days of strong gains.

Concern that robust oil price gains could encourage more output weighed on the energy market. Oil futures have risen nearly 90 percent from 12-year lows hit this winter.

“The global surplus still exists and there is still a possibility that oil prices could retrace further,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York.

Brent LCOc1 dipped 15 cents to settle at $49.59 after earlier rising to $50.51, its highest level since early November. U.S. crude futures CLc1 fell 8 cents to settle at $49.48 after rising to $50.21, the highest level since mid-October.

U.S. stocks ended nearly flat after gaining 2 percent over the previous two sessions, with advancing defensive sectors offsetting declines in materials, banks and other cyclical industries.

Equity investors this week have grown more comfortable with expectations the Federal Reserve could raise interest rates as soon as June, with many taking the view that such a hike would reflect improvement in the country’s economy.

“People are taking their foot off the gas after making a bunch of money, and now they’re waiting for the next data point,” said Phil Blancato, chief executive of Ladenburg Thalmann Asset Management in New York.

The Dow Jones industrial average ended down 23.22 points, or 0.13 percent, at 17,828.29, the S&P 500 lost 0.44 points, or 0.02 percent, to 2,090.1 and the Nasdaq Composite added 6.88 points, or 0.14 percent, to 4,901.77.

MSCI’s all-country world stock index rose 0.2 percent, while the FTSEurofirst 300 closed up 0.2 percent.

The U.S. dollar index, which measures the greenback against a basket of six major currencies, was down 0.2 percent as data on U.S. durables orders added to uncertainty surrounding the outlook for rates.

Orders for long-lasting U.S. manufactured goods surged in April on strong demand for transportation equipment and a range of other products. But U.S. business spending intentions weakened in April for a third straight month amid soft demand for machinery.

Investors are looking ahead to a speech by Fed Chair Janet Yellen on Friday for more clues on the U.S. rate outlook.

In the U.S. Treasuries market, prices rose as solid bidding at a $28 billion seven-year note sale reignited bond demand.

Benchmark 10-year Treasury notes were up 10/32 in price, yielding 1.833 percent, down 4 basis points from late on Wednesday. The two-year yield was down 4 basis points at 0.875 percent.

Gold fell, reversing early gains. Spot gold was down 0.3 percent at $1,220.16 an ounce.

Courtesy : TheNews



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