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Monday Outlook: Oil prices dropped early on Monday

Monday Outlook: Oil prices dropped early on Monday

Oil prices dropped early on Monday under pressure from a rise in oil drilling activity in the United States as energy services firm Baker Hughes said on Friday that U.S. energy companies added seven oil rigs drilling for new production in the week to April 13, bringing the total to 815 - the highest since March 2015.

Brent crude oil futures were at $71.87 per barrel at 0124 GMT, down 71 cents, or 1 percent from their previous close.

U.S. West Texas Intermediate (WTI) crude futures were down 59 cents, or 0.9 percent, at $66.80 a barrel.

Tensions in the Middle East over the weekend weighed on international stock markets early on Monday.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.4 percent as Chinese blue chips took an early 0.7 percent dip.

On Wall Street, the Dow Jones Industrial Average fell 122.91 points on Friday, or 0.5 percent, to 24,360.14, the S&P 500 lost 7.69 points, or 0.29 percent, to 2,656.30 and the Nasdaq Composite dropped 33.60 points, or 0.47 percent, to 7,106.65.

In the Middle East, most markets traded higher on Sunday.

“Regional markets have lagged global risky assets over the last four years, so the sharp recovery in oil prices so far further underpins the bull case for regional markets," Mohamed El Jamal, managing director at Abu Dhabi’s Waha Capital told Reuters.

"Today’s price action demonstrates that despite the geopolitical risks, investors remain in a buy-the-dip mode in the Gulf Cooperation Council," El Jamal told Reuters on Sunday.

Saudi Arabia’s index added 1.9 percent supported by a rise in oil prices at the end of last week. Blue chip Saudi Basic Industries added 1.8 percent and Saudi Kayan Petrochemical was up 2.7 percent.

Dubai’s index gained 1.8 percent as amusement park operator DXB Entertainment gained 1.4 percent. The stock started rising last week after it announced an increase in visitor numbers to its facilities in the first quarter of this year.

Real estate developer Deyaar rose 2.2 percent after reporting a 25 percent rise in first-quarter net profit.

Abu Dhabi’s index rose 1.0 percent as Dana Gas added 2.2 percent and real estate developer Aldar Properties gained 2.9 percent after raising its foreign ownership limit to 49 percent - up from 40 percent.

Egypt’s blue-chip index lost 0.2 percent, Bahrain’s index edged up 0.1 percent, Qatar's index dropped 0.3 percent while the Kuwaiti and Omani markets were closed for public holidays.

In currencies, the dollar index against a basket of six major currencies eased a touch to 89.772 early on Monday. The dollar was a fraction firmer on the yen at 107.40, while the euro was steady at $1.2330.

Spot gold, seen as a safe haven added 0.7 percent on Friday to $1,345.01 an ounce, as investors concerned at the end of the week about tensions in the Middle East. Early on Monday, spot gold eased slightly.

 

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