Oil Prices Hit Fresh Five-month High

Oil prices scored fresh five-month peaks Wednesday on unrest in the crude-rich Middle East and an OPEC+ call for its members to maintain its strategy of reducing output

New York, (UrduPoint / Pakistan Point News - 4th Apr, 2024) Oil prices scored fresh five-month peaks Wednesday on unrest in the crude-rich Middle East and an OPEC+ call for its members to maintain its strategy of reducing output.

Eurozone stocks advanced as a drop in inflation raised hopes of a rate cut by the European Central Bank, while Wall Street stocks finished little changed following mixed US data.

Asian stocks mostly sank, with a massive earthquake in Taiwan rocking sentiment.

Gold zoomed to an all-time pinnacle at $2,230.15 per ounce before pulling back slightly. The yellow metal has been boosted by haven demand amid geopolitical tensions and the prospect of rate cuts.

Oil prices continued to advance with Brent crude closing in on $90 per barrel, as OPEC experts met to discuss extending supply cuts.

"Heightened geopolitical risks linked to escalating conflict in the Middle East, OPEC supply cuts and better data out of China are helping to drive bullish sentiment currently," said James Harte of TickMill Group.

The Paris stock exchange gained 0.3 percent and Frankfurt rose 0.3 percent after investors seized on data showing the eurozone's annual rate of inflation decelerated to 2.4 percent last month from 2.6 percent in February thanks to a continued slowdown in food and drink price increases.

Cooling inflation and a deepening downturn in the manufacturing sector "are cementing expectations that the ECB will start cutting interest rates in June, lifting stocks," City Index analyst Fiona Cincotta told AFP.

Traders have pushed global equities higher for months, driven by optimism that the Fed will begin easing its monetary policy as soon as June as US inflation comes back towards officials' two percent target.

But forecast-busting US data on a range of indicators including inflation, factory activity and jobs has dimmed those hopes.

But Tom Cahill of Ventura Wealth Management said he was encouraged that Wednesday's US services report showed a retreat in prices in March, a better inflation picture than some recent data points.

Federal Reserve Chair Jerome Powell cautioned that lowering interest rates too soon could be disruptive, even as he kept the door open for cuts later in the year.

"The risk, though, of moving too soon, really is... that inflation does move up," he said, adding it "would be quite disruptive if we were to have to then come back in."

But if the US economy continues to evolve as expected, most Fed participants still expect it will be "appropriate to begin lowering the policy rate at some point this year," he said.