Published: Wed, May 17, 2017
World | By Carl Welch

Stocks rise with oil, cyber attack; weak data knocks dollar

Stocks rise with oil, cyber attack; weak data knocks dollar

Over 13 per cent of the FTSE 100 is weighted towards oil and gas stocks, making it the largest sector on the index and meaning that moves in the price of crude tend to have an outsized effect on the FTSE 100 as a whole. In addition to production cuts and steady demand growth, a major contribution to falling crude stocks in the next few months will be a ramp-up in global crude oil runs.

The Organization of the Petroleum Exporting Countries, Russia and other producers originally agreed to cut output by 1.8 million barrels per day in the first half of 2017, with a possible six-month extension.

"We think the rebalancing is here and the rebalancing will continue", Neil Atkinson, head of the oil industry and markets division at the IEA, told CNBC on Tuesday.

An extension of the cuts at already agreed-upon volumes is needed to reach the goal of paring world inventories to their five-year average, Kuwait's Oil Minister Issam Almarzooq said Tuesday in an emailed statement.

"An extension of OPEC and Russia's oil production cuts for another nine months should put a floor under the oil price in the mid-$40 range as the market inches gradually towards balance", said Ric Spooner, chief market analyst at CMC Markets.

European benchmark North Sea Brent crude rose $1.54 to $52.38 a barrel by 1005 GMT (6.05 a.m. ET) and traded intraday at $52.52, the highest since April 24. Economists forecast that job creation bounced back last month after a disappointing March, in the latest sign of U.S. economic strength supporting the Fed's plans for more interest rate increases this year.

Saudi, the de-facto leader of OPEC, and Russian Federation, the world's biggest producer, together control a fifth of global supplies. West Texas Intermediate (WTI) was dealing oil at 3.2 percent rise at $49.40 worldwide Brent at $52.47 per barrel achieving the same percentage rise.

Oil has gained support from the deal but inventories remain high and rising output from other producers, such as the United States, is keeping prices below the US$60 that top exporter Saudi Arabia would like.

The U.S. rig count rose for the 17th week in a row to the highest level since August 2015 last week, implying that further gains in domestic production are ahead.

Crude stockpiles in the most industrialized nations increased from the fourth quarter of 2016 by 31 million barrels to just over 3 billion - 276 million barrels above the five-year average, said OPEC last week.

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