LONDON, Nov 30 — Oil rose the most in seven months after Opec ministers were said to have forged a deal to cut production, sending stocks of energy producers and currencies of commodity-exporting nations higher.
Crude rebounded from a two-week low after some delegates at the meeting of oil producers in Vienna today said they reached an agreement to cut supply by 1.2 million barrels a day. Russia’s rouble and Mexico’s peso advanced as companies from Exxon Mobile Corp to Royal Dutch Shell Plc gained. Royal Bank of Scotland Group Plc slipped to a three-week low after failing the Bank of England’s toughest-ever stress test. Treasuries fell and the dollar extended its gain as a report showed US companies boosted hiring in November faster than forecast.
The agreement to cut production for the first time in eight years reverberated through financial markets, lifting prospects for countries whose finances have been ravaged by the oil crisis. The market earlier this week had assigned odds of just 30 per cent that producers would overcome differences, according to Goldman Sachs Group Inc. The agreement is likely to include an additional reduction of about 600,000 barrels a day by non-Opec countries.
“If a larger cut is announced and non-Opec countries contribute then we will see the price jumping above US$55 (RM245) a barrel,” said Giovanni Staunovo, commodity analyst at UBS Group AG in Zurich.
WTI crude futures surged 6.7 per cent to US$48.27 a barrel as of 9.49am in New York, the most since April, after tumbling 3.9 per cent yesterday. Base metals rebounded in London, with zinc and copper both climbing 0.7 per cent. The London Metal Exchange Index tumbled 3.4 per cent yesterday, its biggest one-day retreat in more than a year.
The S&P 500 Index was up 0.3 per cent, with Exxon climbing 2.3 per cent. In Europe, BP Plc, Shell and Eni SpA climbed at least 3.4 per cent. Linde AG led chemical companies higher in Europe, gaining 5.9 per cent after saying it’s reviewing a revised merger proposal from Praxair Inc. Royal Bank of Scotland declined as much as 5 per cent in London trading, reaching its lowest since November 9. Brazil’s state-run oil producer Petroleo Brasileiro SA jumped as much as 9.5 per cent, the biggest intraday advance since March and the best performer on the Ibovespa benchmark index.
Bloomberg’s dollar gauge advanced 0.4 per cent, pushing its gain this month to 3.7 per cent, the most since May. Russia’s rouble gained 1.5 per cent versus its US counterpart and Norway’s krone was 0.9 per cent stronger.
US government bonds fell, pushing the yield on 10-year Treasuries up nine basis points to 2.38 per cent. Private payrolls in the US climbed by 216,000 this month, after a 119,000 gain in October that was revised lower, data from the ADP Research Institute in Roseland, New Jersey, showed today. The median estimate of economists surveyed by Bloomberg was for an increase of 170,000 jobs. — Bloomberg