Higher Open Likely For US Markets: Oil Price Picks Up

Higher open likely for the U.S markets Thursday after the main U. S. stock index futures moved up on Thursday morning sustaining the momentum induced by Wall Street’s rally in the past two days.

At around 4.00 a.m. ET, Dow futures jumped 68 points and a positive open of 73 points was in sight. Futures on the S&P 500 and Nasdaq were also up.

While the comments of Fed chief Jerome Powell boosted market-sentiments in terms of a rate cut, trade tensions see no abatement.

The threat of President Donald Trump to slap a 5 percent tariff on all Mexican imports loomed as mutual talks did not yield any agreement so far.

At the China front, Trump told reporters at the Irish airport of Shannon that tariffs on Chinese goods would be hiked by another $300 billion if necessary.

Asia Pacific markets showed mixed trends Thursday. China’s Shanghai Composite fell 1.17 percent while Hong Kong’s Hang Seng index moved up fractionally in the last hour of trade.

The gains on Wall Street sent out good vibes to the investor community. Japan’s Nikkei 225 lost earlier gains and finished near flat while the Topix declined 0.34 percent.

Australia’s ASX 200 rose 0.39 percent.

South Korea markets were shut for a public holiday.

According to analysts, global markets have priced the possibility of rate cuts after Fed Chair Jerome Powell said actions to “sustain the expansion” would follow.

European stocks jumped Thursday morning as investors waited for the decision of European Central Bank on rates. Stoxx 600 was up 0.6 percent in the morning session.

Oil price improves

Oil prices picked up slightly on Thursday after plunging to nearly five-month lows on Wednesday. But sentiments are weak due to rising U.S. supply and a slowing global economy.

Brent crude futures gained 37 cents to hit $61 a barrel at 0831 GMT from the last settlement. The U.S. West Texas Intermediate crude futures jumped 16 cents at $51.84 per barrel.

Factors such as surging U.S. crude inventories and global economic slowdown have started tempering oil prices that are currently backed by OPEC production cuts and supply squeeze caused by the U.S sanctions on Iran and Venezuela.

“Rising U.S. production is offsetting the efforts from OPEC+, and if we add the negative effect a trade war on energy demand, the result is lower prices,” commented Alfonso Esparza, senior analyst at futures brokerage Oanda.

Gold up

Gold prices zoomed on Thursday but stayed below the 15-week high of the previous session.

Gold prices are backed by trade worries and a possible U.S. rate cut. Investors have reaped profits in bullion after the recent rally.

Spot gold jumped 0.3 percent to $1,333.58 per ounce at 0727 GMT. The yellow metal hit the highest level at $1,343.86 on Wednesday. The U.S. gold futures rose 0.3 percent to $1,337.20 per ounce.

“The Fed’s dovish signal will obviously boost gold prices and weaken the dollar,” commented Benjamin Lu, Singapore based analyst with Phillip Futures.