Oil prices have stabilized near its 28-month high, Asian stocks eke out another peak earlier todayPosted on Thursday, November 9 2017 at 4:46 pm GMT+0000
Oil prices have stabilized near its 28-month high
After the slight correction lower on Wednesday, oil prices appeared to stabilize today near a 28-month high.
This rise in prices is certainly due to a string of escalatory moves in the Gulf in recent days, whether inside Saudi Arabia as well as the rising SA-Iran tension. While optimism about potential extension of supply cut to the end of next year, also continue to support oil prices.
But I do not expect this Bull Run to persistently endure. The big challenge that will threaten oil gains, is the possibility of a rise in U.S. shale-oil production. At current prices, OPEC expects shale-oil production to rise to 7.5 million barrels from 5 million barrels per day. This 50% rise would offset OPEC and Russia efforts to control the supply by cutting production.
Asian stocks eke out another peak earlier today
Stocks in most Asian countries rose during today’s trading session. Of course, this rise was driven by the rise in the US indices which found support from technology stocks.
In Tokyo today, Shares in the Topix index soared to their highest level in 26 years. This indicator recorded a 20% rise since one year ago. The latest Bull Run came after Shinzo Abe’s victory, which confirmed the persistence of ultra-easy monetary policy and negative interest rates that support stocks heavily.
The Nikkei 225 index rose nearly 2%, before retreating aggressively on futures-driven trading ahead of the following day’s options settlement.
Stocks in South Korea, New Zealand, Australia and Hong Kong eke out another peak, while Chinese stock gains remained limited while waiting for outcomes of Trump’s China visit.
On the other hand, stocks are generally facing a major challenge marked by the possible one-year tax cut delay. Such delay once confirmed, will have a negative impact on investor sentiment and lead to major declines in various markets.