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Global Stocks and Oil Prices Rise Reflecting Re-Opening Optimism, Despite Covid-19 Releated Losses

May 26, 2020

 

 

Global stocks rise as 're-opening optimism' takes hold

By Sherisse Pham and Charles Riley, CNN Business

Updated 4:47 AM ET, Tue May 26, 2020

Hong Kong/London (CNN Business)Global stocks and US futures rose on Tuesday, as a growing number of cities and countries around the world take steps toward re-opening their economies.

Japan's Nikkei 225 (N225) was among the biggest winners in Asia, climbing 2.6% after Prime Minister Shinzo Abe on Monday lifted the state of emergency for the entire nation and gave his support for a huge new stimulus package. Benchmark indexes in Shanghai (SHCOMP) and Taipei added 1%, while Australia's ASX All Ordinaries added 2.8% In Europe, Germany's DAX (DAX) increased by 0.8% in early trading and France's CAC 40 (CAC40) added 1.3%. The FTSE 100 (UKX) gained more than 2% in London. UK Prime Minister Boris Johnson on Monday announced plans to reopen all shops by the middle of June. US stock futures also rose after Americans crowded onto packed beaches in Florida, Maryland, Georgia, Virginia and Indiana for the Memorial Day weekend. Many states have begun lifting restrictions on businesses and public spaces.

Dow futures were up 490 points, or around 2%. Futures for the S&P and Nasdaq added 1.9%. close dialog BEFORE MARKETS OPEN START YOUR DAY SMART Get essential news and analysis on global markets with CNN Business’ daily newsletter. By subscribing you agree to our privacy policy. There is a sense of "re-opening optimism" among investors, Stephen Innes, global market strategist at AxiCorp, wrote in a research note. Oil prices, which have been slammed by the sharp drop in demand caused by the pandemic, jumped during Asian trading hours Tuesday. US crude futures were up 3.7% to trade at $34.46 per barrel. Brent crude, the international oil benchmark, rose 2.3% to $36.36 per barrel.

Hong Kong stocks

Hong Kong's Hang Seng Index (HSI) advanced more than 2%, recovering some ground after investors were stunned by news last week that Beijing plans to implement a controversial national security law in the financial hub. The Hang Seng had its worst day in nearly five years on Friday after Beijing said that it would effectively bypass Hong Kong's legislature to enact the law. China's foreign ministry commissioner in Hong Kong, Xie Fang, moved to reassure rattled investors on Monday evening. The legislation won't affect freedoms of speech, press, publication and assembly, Xie said, according to state-run news agency Xinhua. Xie added that the controversial legislation will protect the operations of international businesses in Hong Kong. The "clouds of dust in Hong Kong have settled quicker than anyone had expected. Local risk sentiment isn't nearly as gnarly as everyone had feared," said Innes.

Still, the move by Beijing is expected to fuel another round of clashes between pro-democracy protesters in Hong Kong and the city's police force. — CNN's Laura He and Kaori Enjoji contributed to this report.

https://www.cnn.com/2020/05/25/investing/global-stocks/index.html

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Russia’s Energy Minister Sees Oil Market Rebalancing By July

Oil Price, By Julianne Geiger -

May 25, 2020, 5:30 PM CDT

Amid the coronavirus pandemic, oil demand has plummeted over the last few months but Russia’s oil minister sees the global supply and demand situation rebalancing within two months, according to RIA sources, cited by Reuters.

Russia’s Energy Ministry expects oil demand to improve in May, and notes that we are already seeing major shifts to global oil supplies, with production cuts—either purposefully or otherwise—rising to nearly 15 million barrels per day.

The global surplus, the energy ministry says, is between 7 million and 12 million barrels per day.

Reuters sources have indicated that OPEC+ wants to keep the existing production cuts beyond the current June expiry in order to rebalance the market.

Saudi Arabia and Iraq—two of OPEC’s largest oil producers, have reaffirmed their commitment to rebalance the oil markets. Saudi Arabia has pledged to cut an additional 1 million bpd on top  of its existing quota. Iraq, however, may find it difficult to achieve its promised targets.

The news that the Russian energy ministry sees the market rebalancing by July comes at the same time when Russia is considering banning all oil products imports, in a move designed to protect its oil refining industry at a time of decreased demand.

Russia has agreed to cut its oil production to 8.5 million bpd throughout the duration of the OPEC+ cuts. Normally, Russia’s adherence to its stated oil production quotas have been subpar, but this time, a lack of demand for crude has spurred the country into swift action.

The IEA last week said that it saw signs that the oil market would come into balance quicker than originally thought, after the United States and OPEC brought their production lower—and lower more quickly—than most had anticipated.

https://oilprice.com/Latest-Energy-News/World-News/Russias-Energy-Minister-Sees-Oil-Market-Rebalancing-By-July.html 

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