Oil climbs with Asia stocks on supply speculation

A pedestrian walks past quotation boards flashing the key Nikkei index of the Tokyo Stock Exchange. PHOTO: AFP
A pedestrian walks past quotation boards flashing the key Nikkei index of the Tokyo Stock Exchange. PHOTO: AFP

HONG KONG (BLOOMBERG) - Crude oil climbed toward US$51 (S$70.6) a barrel and Asian stocks advanced, helped by a rise in energy producers amid speculation cuts to crude supplies will be extended further. The yen declined after a volatile week for financial markets.

Stocks from Sydney to Hong Kong rose, with energy and raw-materials shares posting the biggest moves on the MSCI Asia Pacific Index. Japan's Topix index rose 0.5 per cent. The measure lost 1.3 per cent last week. Australia's S&P/ASX 200 Index climbed 0.8 per cent and South Korea's Kospi index advanced 0.4 per cent. Hong Kong's Hang Seng climbed 0.9 per cent and the Hang Seng China Enterprises Index jumped 1.1 per cent. The Shanghai Composite slipped 0.2 per cent. At noon, Singapore's Straits Times Index was up 2.42 points at 3,219.34.

Saudi Arabia's energy minister said all producers participating in a deal to limit output agree on extending the cuts by nine months. The won surged even after North Korea conducted another ballistic missile test on Sunday. The pound fell as the UK threatened to exit talks on its departure from Europe.

Global equities are close to a record as investors bet global growth can withstand political turmoil in the US and Brazil, as well as further increases in interest rates. Money managers will be scrutinizing minutes released this week from the Federal Reserve's latest meeting, with a more than 80 per cent chance that rates will go up again next month.

In the US, the House Oversight and Government Reform Committee is pursuing any records of President Donald Trump's meetings with the fired Federal Bureau of Investigation director James Comey. Mr Trump continues his trip in the Middle East, where US companies signed multi-billion dollar deals in the defense, energy and infrastructure industries.

"With Trump on a tour, the hope is we see less news over the next couple of days - a chance for the waters to settle," said Andrew Sullivan, a managing director for sales trading at Haitong International Securities Group. "It's another overhang on the market. We've got all these markets trading at highs and people don't want to miss out, but they don't want to be caught out."

In Brazil, President Michel Temer suffered a setback in trying to fend off allegations of corruption and cover-up after the country's influential bar association voted in favor of his impeachment. The controversy sparked the biggest weekly selloff on the country's benchmark equity index in five years.

Crude climbed 1.1 per cent to US$50.84 per barrel, extending a 2 per cent advance of last Friday. Oil is trading at the highest levels in a month. Gold slid 0.2 per cent to US$1,253.50 an ounce. The metal jumped 2.2 per cent last week.