Reports that Washington is preparing a plan to release roughly a million barrels of oil a day helped reverse a rebound in crude ahead of an OPEC+ supply meeting, where the cartel is expected to stick with its strategy of a modest output boost in May. French inflation accelerated more than expected to reach another record, following unexpectedly high readings on Wednesday from Germany and Spain.
Officials from Ukraine and Russia are set to resume talks via video conference on Friday, according to a Ukrainian negotiator, though there was no immediate confirmation from Moscow.
Shares in oil companies including Exxon Mobil Corp. and Occidental Petroleum Corp. declined in premarket trading. Brent and West Texas Intermediate prices dropped about 6%, while European natural gas fell as top consumer Germany signaled Russia is softening its demand for ruble payments.
U.S.-listed Chinese stocks are heading for a lower open after Securities and Exchange Commission Chair Gary Gensler dialed down prospects of an imminent deal to allow Chinese firms to keep trading on American exchanges.
Global stocks are on track for their worst quarter in two years amid concerns about a growth slowdown, with the war in Ukraine driving volatility in commodity markets. Investors are also unnerved by the prospect of a sharper withdrawal of stimulus, as the fastest inflation in a generation forces central banks to become more aggressive with interest-rate hikes. Markets now see a strong chance the Federal Reserve will lift rates by a half point at its May meeting.
“Aside from quarter-end considerations, oil is very much the center of attention,” Simon Ballard, chief economist at First Abu Dhabi Bank, wrote in a note to investors. Still, “all the usual suspects are still in play, keeping the market in check, including the specter of the Fed pursuing an aggressive path of monetary policy normalization over the coming months.”
Friday’s video discussions between Ukraine and Russia would follow in-person talks this week in Turkey that didn’t produce a short-term cease-fire or major progress toward a broader peace deal. Ukraine’s negotiator said the hope was to have enough agreed on paper in another week to be able to move toward a meeting between President Vladimir Putin and President Volodymyr Zelenskiy.
Meanwhile, Chinese data and regulatory concerns weighed on Asia stocks. Chinese authorities are considering a plan to raise several hundred billion yuan for a new fund to backstop troubled financial firms, according to people familiar with the matter.
Just how frightening is yield-curve inversion? That’s the theme of the MLIV survey this week. Please click here to participate.
Some key events to watch this week:
- OPEC and non-OPEC ministerial meeting to discuss production targets, Thursday
- New York Fed President John Williams to speak, Thursday
- U.S. jobs report, Friday
Some of the main moves in markets:
- Futures on the S&P 500 were little changed as of 7:10 a.m. New York time
- Futures on the Nasdaq 100 rose 0.2%
- Futures on the Dow Jones Industrial Average were little changed
- The Stoxx Europe 600 fell 0.3%
- The MSCI World index fell 0.3%
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.5% to $1.1107
- The British pound was little changed at $1.3138
- The Japanese yen was little changed at 121.75 per dollar
- The yield on 10-year Treasuries declined four basis points to 2.31%
- Germany’s 10-year yield declined seven basis points to 0.57%
- Britain’s 10-year yield declined four basis points to 1.63%
- West Texas Intermediate crude fell 6.3% to $101.06 a barrel
- Gold futures fell 0.2% to $1,934.50 an ounce