Oil skids on oversupply fears, stocks jump on virus slowdown


Business, Market

Brent crude fell as much as $3 in Asian trading after Saudi Arabia and Russia postponed a meeting over a potential pact to cut production

Representative Image (AFP)

Sydney: Oil prices skid on Monday after Saudi-Russian negotiations to cut output were delayed, keeping oversupply concerns alive, while stocks jumped as investors were encouraged by a slowdown in coronavirus-related deaths and new cases.

Brent crude fell as much as $3 in early Asian trading after Saudi Arabia and Russia postponed a meeting over a potential pact to cut production to Thursday.

Analysts said the news could lead to some sell-off in currency markets too.

The pound fell 0.4 per cent in early trade on Monday in a knee-jerk reaction and was last down 0.3 per cent at $1.2222.

Indeed, equity investors looked at the positives with major European nations including France and Italy reporting lower fatality rates.

US stock futures jumped more than 1.5 per cent in early Asian trading on Monday after US President Donald Trump expressed hope the country was seeing a levelling off of the coronavirus crisis.

Investors took solace from the fact that Covid-19 cases appeared to be reaching a peak in Europe with Italy seeing the number of patients in intensive care falling for the second consecutive day.

In Asia, Australia’s benchmark index added 0.5 per cent, Japan’s Nikkei was up 0.2 per cent while South Korea’s KOSPI index climbed 1.4 per cent.

That left MSCI’s broadest index of Asian shares outside of Japan up 0.1 per cent. China markets were closed for a public holiday.

"Focus in markets will now turn to the path out of lockdown and to what extent containment measures can be lifted without risking a second wave of infections," National Australia Bank analyst Tapas Strickland wrote in a note.

The pandemic has claimed more than 64,000 deaths as it further exploded in the United States and the death toll climbed in Spain and Italy, according to a Reuters tally.

Elsewhere in currencies, the dollar was up a touch against the yen at 108.58. The euro was barely moved at $1.0803 while the risk sensitive Australian dollar was up 0.2 per cent at $0.6004.

In commodities, Brent crude futures slipped 6.2 per cent, or $2.13, to $31.98 a barrel while US crude dived 7.4 per cent, or $2.12, to $26.12.

Spot gold was down 0.2 per cent at $1,612.9 an ounce.