Crude oil rose a second day, breaching $51 a barrel in New York before a meeting between Opec and other major producers on output cuts. Asian stocks fluctuated at the end of their best week since September, while bonds and the Korean won declined.
US crude advanced to $51.06 a barrel before talks Saturday in Vienna among the Organization of Petroleum Exporting Countries and 14 other nations. The Asia-Pacific equity benchmark swung as shares in Sydney and Tokyo climbed, while those in South Korea slipped. Bonds from Australia to Japan fell after the European Central Bank pledged to cut bond buying, while at the same time extending quantitative easing until the end of 2017. The won trimmed its biggest weekly advance in two months as the dollar gained ground.
Opec’s shock deal aimed at stabilizing oil prices will return to focus this weekend, with the meeting potentially giving investors clues as to whether the agreement will be fulfilled. While the ECB’s mixed message initially wrong-footed the market, it was eventually seen as a signal to buy equities with the extension of the current asset purchase program by three months more than economists had expected. The attention now shifts to the Federal Reserve, with traders all but convinced the US will end the year with an interest-rate hike.
“The immediate focus for the market is the discussions between Opec and non-Opec members this weekend,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney. “The sweet spot for prices is around $55 a barrel. Anything higher and the market will see more supply.”
The Asian data slate is full for Friday, with China to update on consumer and producer prices as well as foreign-direct investment.
West Texas Intermediate crude futures climbed, extending Thursday’s 2.2 percent bounce and reducing oil’s retreat this week to 1.2 percent. Russia will fulfill its pledge to cut output by as much as 300,000 barrels a day if Opec follows through on its commitment to curb production, according to a government official familiar with the matter. Representatives of countries including Mexico and Oman will meet with Opec members in the Austrian capital. Gold for immediate delivery fell for a second session, declining 0.3 percent to $1,167.91 an ounce.
The yen, which typically moves at odds with Japanese stocks, fell another 0.2 percent to 114.31 per dollar, following a 0.2 percent pullback last session. It’s weakened 0.7 percent this week, set for its longest run of weekly losses in two years. The euro was steady at $1.0616 following a 1.3 percent slump, which erased an initial surge of as much as 1.1 percent Thursday following the ECB’s statement.