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Morning markets: Oil price rally sends Wall St higher

Thursday, 4 Aug 2016 05:36:21 | Rebecca Hyam Rebecca Hyan

Crude oil prices rose for the first time in six days. (ABC News)

An overnight rally in oil prices boosted the US energy sector, sending Wall Street higher, and breaking a seven-day losing streak for US markets.

Markets at 8:10am (AEST):

  • ASX SPI 200 futures +0.5pc to 5,446
  • AUD: 75.85 US cents, 56.95 British pence, 76.85 Japanese yen, 68 euro cents, $NZ1.061
  • US: Dow Jones +0.2pc to 18,355, S&P 500 +0.3pc to 2,164, Nasdaq +0.4pc to 5,160
  • Europe: Euro Stoxx 50 +0.1pc to 2,911, FTSE 100 -0.2pc to 6,634, DAX +0.3pc to 10,170
  • Commodities: Brent crude +3.9pc to $US43.42 a barrel, iron ore flat at $US60.70 a tonne, gold -0.4pc to $US1,358 an ounce

Crude prices jumped more than 3 per cent, representing their first rise in six days.

West Texas crude oil had risen to $US40.75 a barrel, the price of a barrel of Tapis was also higher at $US42.24

The rise was driven by a significant fall in US gasoline inventories.

IG chief market strategist Chris Weston said oil has shown again that it is one of the world's dominant financial forces.

Oil has once again established itself as the central thematic behind the world's financial markets.

"The fact we saw such a powerful reversal at the trend low, despite US dollar strength, has driven a slight uplift in sentiment.

"Today's session will be key because, while price in US crude traded below Tuesday's low and closed firmly above the high, we now need to see follow through buying (a higher high if you will) to suggest the recent move lower in the barrel is over and consolidation is likely."

In economic news, the US private sector added 179,000 jobs in July, beating analysts' estimates.

On average, they were expecting to see the creation of 170,000 new private sector jobs in the month.

The ADP National Employment Report comes ahead of the official non-farm payrolls report, due out in the US on Friday.

It was a mixed finish in Europe — London's FTSE 100 index fell, while most continental markets edged higher.

The local market is expected to follow Wall Street higher, with futures trade pointing to a solid rebound from yesterday's fall.

At the same time, the Australian dollar was buying 75.85 US cents, holding up relatively well against a surging greenback as a non-voting US Fed official said one rate rise later this year would probably be appropriate.

Today's agenda:

Australia:
  • Downer EDI FY results (9:00am AEST)
  • Suncorp FY results (9:00am AEST)
  • Tabcorp FY results (9:00am AEST)
  • Retail sales (11:30am AEST)

UK:
  • Band of England interest rate decision (9:00pm AEST)

US:
  • Jobless claims (11:30pm AEST)
  • Factory orders (12:00am AEST)

China:
  • Current account (5:00pm AEST)

AustraliaPlus


 

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