HONG KONG, China (AFP) — Energy stocks jumped in Asia Thursday after oil surged past $50 a barrel for the first time this year, providing a bright point as regional bourses generally took a breather.
Oil prices, which have been edging towards the psychological barrier as global supply disruptions mount, were buoyed by data showing a fall in US crude inventories that put another dent in a stubborn glut.
Canada’s central bank also announced that fires in its western provinces, which are a major supplier of crude to the US market, would impact the country’s economic output numbers.
The US Department of Energy said Wednesday that US commercial crude oil inventories fell by 4.2 million barrels in the week to May 20.
“The immediate driver is a good draw on US crude stockpiles, helping to nudge the price up a bit further,” Ric Spooner, a chief analyst at CMC Markets in Sydney, told Bloomberg News.
Traders will now be watching to see if the price can be sustained despite the strong US dollar.
“The market hasn’t had any bad news to knock it off its perch but the price is likely to struggle if it gets into the $50s. There is still quite a bit of inventory around,” Spooner said
Among major energy counters, engineering firm WorleyParsons soared 4.6 percent in Sydney and BHP Biliton was 2.7 percent higher, while in Hong Kong, CNOOC added more than two percent and Sinopec increased 1.3 percent.
Tokyo-listed Inpex also jumped 2.5 percent and JX Holdings advanced 1.4 percent.
Aside from energy stocks, markets across Asia put in a fairly lacklustre session, with Hong Kong up just 0.1 percent compared with a 2.7 percent surge Wednesday.
Seoul was down 0.2 percent, while Sydney and Shanghai both ticked up 0.3 percent by the close. Manila tumbled 1.2 percent.
Tokyo ended flat after adding more than one percent earlier in the day, but embattled airbag supplier Takata skyrocketed on a report that a US private equity firm wants to take control of the company.
Kohlberg Kravis Roberts (KKR) is looking to take over up to 60 percent of the company from the founding family, Japan’s leading business daily Nikkei reported, prompting Takata’s shares to surge 21.16 percent to 458 yen.
– G7 talks open –
Markets are now eyeing Group of Seven summit talks, which kicked off Thursday in Japan, for further trading cues.
Topping the agenda is the sputtering global economy, although divisions are likely to remain over whether the world should spend or save its way out of the malaise, with Japan and Germany at odds on the issue.
China, the world’s second-largest economy, is not present, but a row over its territorial assertiveness in the South China Sea will loom large in the discussions.
Also in sight is a speech by Federal Reserve chair Janet Yellen at Harvard University Friday, as investors await fresh news about a possible US rate rise.
Traders had been beginning to adjust to news of a possible US interest rate hike come June or July, analysts said Wednesday, viewing it as an indication of economic strength.
Elsewhere, New Zealand said Thursday its budget was in the black but warned a British exit from the European Union could derail the strong economic performance Wellington expects over the next few years.
In early European trade, London gained 0.3 percent, Frankfurt added 0.5 percent and Paris added 0.4 percent.
– Key figures around 0900 GMT –
Tokyo: Nikkei 225: UP 0.09 percent at 16,772.46 (close)
Shanghai – Composite: UP 0.3 percent at 2,822.44 (close)
Hong Kong – Hang Seng: UP 0.1 percent at 20,397.11 (close)
Euro/dollar: UP at $1.1180 from $1.1161 on Wednesday
Dollar/yen: DOWN at 109.93 yen from 110.10 yen
London – FTSE 100: UP 0.03 percent at 6,264.93
New York – Dow: UP 0.8 percent at 17,851.51 (close)
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