Stocks Drop but Oil Surges Ahead of OPEC Meeting

European stock markets are mostly down. The FTSE 100 manages slight gains, with demand underpinned by a weaker Pound, but in the Eurozone risk aversion has flared up again and peripheral markets are once again under pressure. In Spain, the election of a radical Socialist and Rajoy critic as the Socialist’s new party leader has contributed to a flaring up of fresh political concerns. On stock markets, at least it is Italy that is underperforming, however, as the European Commission warned that Italy is among the countries that need to deal with large existing stocks of non-performing loans and called on countries to consider options to “facilitate accelerated balance sheet repair”. The Italian MIB was down -along with the DAX but the FTSE 100 up 0.32% on the day. In Asia, it still seemed as though markets had put “Trump anxiety” behind them as higher oil prices helped to lift spirits and markets moved higher, following gains on Wall Street Friday.

Crude Oil Surges Above $51

WTI crude prices logged a new one-month high at $51.26. Demand has picked up after prices wobbled on Friday following weekly data showing an 18th consecutive rise in the U.S. oil rig count. The Baker-Hughes weekly oil rig count revealed the 18th consecutive week of increases, this time adding 8 for a total of 720, and the most since April 2015. That’s the longest weekly streak of increases since 2011, when rigs increased for 19 straight weeks.

Markets are anticipating this Thursday’s OPEC meeting will affirm a nine-month extension in the 1.8 million barrel-a-day output reduction, which has been in place since the start of the year and is due to finish at the end of June. Crude prices have gained 4.7% over the last week, largely on this anticipation of this with the likes of Saudi Arabia, Kuwait and Russia having indicated agreement on the extension.

Portugal finally exits excessive deficit procedure. The European Commission today announced that it recommends that the Excessive Deficit procedure against Portugal should be closed. The recommendations still must be approved by the EU Council, but the recommendation paves the way for Portugal to finally exit the procedure six years after the bailout.