Oil Climbs to Highest Since November as European Shares Retreat – Bloomberg

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Brent crude rose to a six-month high, leading a rebound in commodities and boosting the ruble and mining companies, as supply disruptions in Nigeria added to production woes.

Oil extended last week’s gains as Goldman Sachs Group Inc. increased its price forecast, saying the market had moved into a supply deficit earlier than expected. Precious metals rallied with aluminum and commodity producers climbed, while almost all of the other industry groups in the Stoxx Europe 600 Index fell. Irish bonds advanced, outperforming their euro-area peers, while the Polish zloty strengthened after favorable reports from Moody’s Investors Service. Asian stocks rose from a one-month low. 

The pickup in raw-materials prices is providing some support for global equities after about $1.8 trillion was wiped off the value of the securities in the first two weeks of May amid weaker economic data and disappointing earnings reports. China’s central bank issued a weekend statement saying monetary policy would continue to support growth, after data on new lending, retail sales, industrial production and fixed-asset investment missed economists’ estimates. A Friday report showing a jump in American retail sales bolstered the case for the Federal Reserve to raise interest rates.

Militant attacks and pipeline disruptions have cut Nigerian volumes by at least 30 percent, its petroleum minister said last week.

“Oil is being driven by what’s happening in Nigeria at the moment — that’s changed sentiment towards Brent and has brought an expected recovery forward,” said John Meyer, an analyst at broker SP Angel Corporate Finance LLP in London. “Rising oil prices tend to support the commodities complex.”

Commodities

Brent rose 2.1 percent to $48.82 a barrel at 7:18 a.m. in New York, reaching the highest since November, after Friday’s 0.5 percent loss. China’s refineries processed crude at record rates in April, helping ease a supply glut as the number of active rigs in the U.S. declines.

West Texas Intermediate climbed 2.1 percent to $47.18. Goldman Sachs raised its oil-price forecast for the second half to $50, from a March estimate of $45.

Aluminum rose 0.3 percent in London after weekend data showed China’s primary output of the metal slipped 1.2 percent in April from a year earlier. Gold added 0.7 percent after data showed holdings in exchange-traded funds increased to the highest since 2013. Silver gained 1.2 percent.

Platinum gained 0.2 percent to $1,053.90 an ounce as the industry gathered in London for the annual Platinum Week meeting. The metal may climb 20 percent by the end of next year, according to a Bloomberg survey of 12 traders and analysts.

Stocks

The Stoxx Europe 600 Index declined 0.5 percent, falling for a third time in four days. German and Swiss markets were among those shut, and volume of shares changing hands was about 50 percent lower than the 30-day average.

Anglo American Plc and Tullow Oil Plc advanced more than 4.5 percent. Telecom Italia SpA climbed 2.4 percent after almost tripling its target for reducing expenses to 1.6 billion euros ($1.8 billion) by 2018.

Hennes & Mauritz AB dropped 1 percent as its April sales rose less than analysts had estimated.

The MSCI Emerging Markets Index added 0.1 percent after falling as much as 0.4 percent on Monday. Benchmark gauges in Russia, Poland, South Africa and the Philippines climbed at least 0.9 percent. 

“The firmer oil price is helping emerging-market equities today despite the weaker China data over the weekend,” said Michael Wang, a strategist at hedge fund Amiya Capital LLP in London, who favors Indian, Mexican and South Korean stocks.

Poland’s benchmark stock gauge climbed 1.3 percent, the most in a month. Its bonds also gained, sending yields on five-year notes down seven basis points to 2.11 percent, the lowest since Jan. 14, the day before S&P Global Ratings’ surprise downgrade of Polish debt. The zloty strengthened 0.8 percent against the euro.

Moody’s kept the nation’s long-term credit rating at A2, five steps above junk, while lowering the outlook to negative for the first time in a decade. All but one of the 21 analysts surveyed by Bloomberg had forecast that Moody’s would take negative action.

Futures on the S&P 500 Index expiring next month were little changed after the gauge completed a third weekly decline, its longest streak since January.

Anacor Pharmaceuticals Inc. jumped 53 percent in early New York trading after Pfizer Inc. said it would buy it. Terex Corp. rallied 9.4 percent as Finnish crane maker Konecranes Oyj agreed to acquire one of its businesses, paving the way for China’s Zoomlion Heavy Industry Science & Technology Co. to buy the rest of the U.S. company. Memorial Resource Development Corp. climbed 8.9 percent as Range Resources Corp. agreed to purchase it.

Yahoo! Inc. rose 2.4 percent in early New York trading after people familiar with the matter said Berkshire Hathaway Inc. Chairman Warren Buffett is backing a group bidding for the company’s Internet assets. Tribune Publishing Co. surged 17 percent after Gannett Co. boosted its all-cash offer for the publisher.

A sudden plunge by Chinese stocks in Hong Kong had traders searching for a trigger for the slump that coincided with a surge in futures volumes. The Hang Seng China Enterprises Index tracking some of the nation’s biggest companies tumbled from an advance of 1 percent to a loss of 1.5 percent in about two minutes, before rebounding back to a gain.

Currencies

Russia’s ruble climbed 0.7 percent against the dollar as oil advanced, while Australia’s dollar strengthened 0.3 percent against its U.S. counterpart.

The Bloomberg Dollar Spot Index held near its highest close since March as the greenback gained 0.3 percent versus the Japanese yen. U.S. retail sales climbed in April by the most in 13 months and a gauge of consumer confidence surged in early May to an almost one-year high, reports showed Friday.

South Korea’s won and South Africa’s rand led declines on the Chinese data. The won dropped 0.7 percent to a two-month low and the rand weakened 1.1 percent. China is the largest trade partner for both countries.

The Thai baht strengthened as much as 0.3 percent after economy expanded 3.2 percent in the first quarter from a year earlier, more than the 2.8 percent growth forecast in a Bloomberg survey.

Bonds

Ireland’s 10-year year bond yield declined one basis points to 0.8 percent, after falling six basis points on Friday. Moody’s raised the rating to A3 from Baa1 with a positive outlook, the company said Saturday in a statement.

Treasuries were little changed, with the yield difference between two- and 10-year debt at the narrowest since 2007, based on closing prices. The spread between the securities was at 94 basis points, compared with 122 basis points at the end of last year.

The odds of a U.S. rate increase by September are 34 percent, Fed Funds futures show. BlackRock Inc. — the world’s biggest money manager — turned bearish on short-term Treasuries last week, saying traders have gone too far in discounting the chances of a rate hike this year.

The yield on Australia’s 10-year sovereign bonds fell to a record-low 2.2 percent, 32 basis points below its level at the end of April. The Reserve Bank of Australia, which this month cut its benchmark interest rate to an unprecedented 1.75 percent, has said core inflation will probably miss the bottom of its 2 percent to 3 percent target range this year and may undershoot into the middle of 2018.