Oil tumbles as Middle-Eastern talks to freeze output struggle
Published 24/09/2016 | 02:30
Oil prices tumbled about 4pc yesterday on signs Saudi Arabia and arch rival Iran were making little progress in achieving preliminary agreement ahead of talks by major crude exporters next week aimed at freezing production.
Also weighing on sentiment was data showing the United States was on track to add the most number of oil rigs in a quarter since the crude price crash began two years ago. Lower equity prices on Wall Street and other world stock markets was another bearish factor.
Benchmark Brent crude oil was down $1.88, or 4pc, at $45.77 a barrel by 1:41pm in the US, wiping out all of the week's previous gains.
European shares ended weaker yesterday, pulling back from two-week highs in the previous session after the Federal Reserve signalled an increasingly cautious approach to future rate hikes, with banks leading sectoral fallers.
In Dublin the ISEQ index ended the session down 0.73pc at 6108.86. Applegreen was among the big decliners, dropping 5.4pc to 26.23cents a share. Bank of Ireland fell 3.125pc to 18.60 cents. Aryzta was the big gainer, adding 8.2pc to hit €39.6 a share in the wake of Gary McGann's appointment as chairman.
The pan-European STOXX 600 index ended a similar 0.7pc lower, retreating after closing at its highest level since September 9 on Thursday.
It rose 2.2pc this week, the best performance in two months, but is still down more than 5pc this year.
"The Fed-fuelled rally that catapulted shares out of the summer doldrums this week is showing some signs of fatigue," said Jasper Lawler, Market Analyst at CMC Markets.
"The focus would now begin to switch to upcoming economic data and whether that makes a rate hike in December more or less likely."
Futures are pricing the chance of a US rate rise in December at 58.4pc, according to CME's FedWatch tool. (Additional reporting Reuters)