Oil Jumps on Middle East Worry; US Stocks Rise
New York: Oil prices climbed to their highest levels of the year on Thursday as tensions in the Middle East sparked supply concerns, while the boost from energy-related stocks helped US equities shrug off a batch of soft economic data.
Brent crude touched a high of $65.13, its highest since December, and was last up 3.6 per cent at $64.97 per barrel, while US crude jumped 3.1 per cent to $57.92 after Saudi Arabia and its allies continued a bombing blitz in Yemen that raised concerns about the security of Middle East oil supplies.
A 1.2 per cent rise in energy shares helped boost US equities, with the Nasdaq above its record closing high of 5,048.62. Strong earnings from AT&T, up 4.2 per cent to $34.25, and eBay, up 3.3 per cent to $58.65, also helped offset a round of lackluster domestic economic data.
"Oil prices are going to continue to remain somewhat volatile, although if you look over the last three or four weeks, what has changed in terms of fundamentals is we have seen US production start to level off," said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas in New York.
"Now we are still oversupplied in the near term but the market is beginning to see the light at the end of the tunnel in terms of a better balance between supply and demand."
The Dow Jones industrial average rose 83.56 points, or 0.46 per cent, to 18,121.83, the S&P 500 gained 10.4 points, or 0.49 per cent, to 2,118.36 and the Nasdaq Composite added 24.21 points, or 0.48 per cent, to 5,059.38.
European shares slipped, with Germany's DAX index underperforming following a disappointing purchasing managers' survey, while weak results from Ericsson hit technology stocks.
Overall, Eurozone private-sector business growth was weaker than forecast, despite help for exporters from a big fall in the euro and the March launch of a sovereign bond-buying program by the European Central Bank.
MSCI's all-country world index of equity performance in 46 countries advanced 0.56 per cent, while the FTSEurofirst 300 index of top European shares closed down 0.46 per cent at 1,620.82. Germany's DAX dropped 1.2 per cent.
US Treasuries yields were little changed on Thursday with benchmark yields hovering near 3-1/2 week highs after a broad selloff in Treasuries, German Bunds and British Gilts on Wednesday.
Benchmark 10-year notes were last up 4/32 in price to yield 1.9577 per cent.
The dollar weakened 0.7 per cent against a basket of major currencies in light of the soft US data and waning fears of a Greek default.
German Chancellor Angela Merkel was expected to tell Greece's prime minister in a meeting on Thursday that she wants to keep Greece in the Eurozone and avoid a default, but will need commitments in technical talks on measures to make public finances sustainable.
