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Oil falls on doubts over OPEC, pipeline restart

Oil prices fell on Tuesday on uncertainty over the outcome of a key OPEC meeting this week due to decide on production policy for the next year.

Brent crude oil (LCOc1) was down 50 cents a barrel at $63.34 a barrel by 1000 GMT. U.S. light crude (CLc1) was 50 cents lower at $57.61, after falling 1.4 percent in the last session.

Members of the Organization of the Petroleum Exporting Countries and other key producers, including Russia, meet on Nov. 30 to discuss whether to continue to limit production in an effort to drain global inventories to help push up prices.

They cut production by 1.8 million barrels per day (bpd) in January and agreed to hold down output until March. The market had expected OPEC to extend the limits by another six to nine months, but this is now less certain.

"We believe that the outcome of this meeting is much more uncertain than usual," Goldman Sachs (NYSE:GS) analysts said, suggesting that the oil market may have been wrong to assume that OPEC would agree to restrict output until the end of 2018.

"We view risks to oil prices as skewed to the downside this week as we believe that current prices, time spreads and positioning already reflect a high probability of a nine-month extension," the Goldman analysts said.

Doubts have emerged over whether Russia will agree to join the OPEC in an extension of production curbs beyond March.

Russia's economy was negatively affected in October by the ongoing curbs, which saw Moscow agree to cut output by 300,000 bpd, Economy Minister Maxim Oreshkin said.

United Arab Emirates energy minister Suhail bin Mohammed al-Mazroui said on Tuesday that while the meeting would not be easy, he was personally optimistic producers would reach an agreement that served the market.

U.S. crude touched $59.05 a barrel on Friday, its highest since mid-2015, fueled by the outage of the Keystone pipeline, one of Canada's main crude export routes to the United States.

But TransCanada Corp (TO:TRP) this week said it would restart the 590,000 barrel-per-day pipeline at reduced pressure on Tuesday after getting approval from U.S. regulators.

Consultancy Wood Mackenzie said it looked as if producers had nearly concluded an agreement to extend cuts until the end of next year.

"(But) if the production cut agreement ends in March 2018, our forecast shows there would be a projected 2.4 million bpd year-on-year increase in world oil supply for 2018," said Ann-Louise Hittle, vice president for macro oils.

Europe cheers Brexit bank verdict, on tenterhooks over Ireland

European shares opened slightly higher on Tuesday as the Bank of England deemed that UK lenders could deal with a "disorderly" Brexit, while the dollar held steady ahead of a confirmation hearing for Federal Reserve chair nominee Jerome Powell.

The FTSEurofirst 300 (FTEU3) index of top European shares was up 0.3 percent, supported by financials, although a stumble in Chinese stocks for a second straight session kept the MSCI All-Country World index (MIWD00000PUS) flat.

European stocks were also buoyed by gains in Royal Dutch Shell (L:RDSa) after the oil major canceled an austerity dividend, while online grocer Ocado (L:OCDO) jumped following a deal with French supermarket Casino (PA:CASP).

The BoE said none of Britain's major lenders would need to raise extra capital if the country crashed out of the European Union, the first time it had come to such a conclusion since it started stress-testing banks in 2014.

But the chances of a hard Brexit were increased by the prospect of a snap election in Ireland which could be called as early as Tuesday, and which would complicate a key Brexit summit next month.

Euro zone government bond yields were pinned to recent lows as the Irish government teetered, with 10-year German yields - the regional benchmark - dropping to 0.33, barely 2 basis points of the November lows. <DE10YT=TWEB>

"If we have snap elections and then if a Brexit deal is in jeopardy then it will have a major impact," said DZ Bank analyst Sebastian Fellechner. "It could lead to a risk-off environment and be a disruptive factor in this very calm market."

The euro <EUR=> was steady at $1.1896, within reach of a two-month high, while the dollar eked 0.1 percent higher against a basket of six major currencies (DXY), after a boost overnight when President Donald Trump tweeted that a tax cut bill was "coming along very well".

Later, the U.S. Senate Banking Committee will hold a hearing to confirm Powell's nomination to the helm of the Federal Reserve. If confirmed, Powell will have to balance tightening policy against still sluggish wages and inflation.

"His opening comments support current market expectations that his appointment as Fed Chair is likely to maintain monetary policy continuity. The Fed's recent comments have signaled more concern over persistently low inflation, which has been weighing on the US dollar," wrote MFUG currency analyst Lee Hardman.

CHINESE SPILLOVER?

Earlier, Asian shares drifted from decade highs as Chinese stocks stumbled for a second straight session, with confidence dented by rising bond yields as Beijing intensified a crackdown on risky financing, threatening to squeeze corporate profits.

Chinese shares reversed early losses with the CSI 300 index (CSI300) ending up 0.2 percent following a heavy sell-off on Monday. Shanghai's SSE (LON:SSE) Composite index (SSEC) closed up 0.3 percent after volatile trading.

The CSI300 index has jumped 22 percent in 2017 so far, with the gains concentrated in a handful of large index-weighted stocks.

"The question is whether further downside in Chinese mainland equities continues in the session ahead and will there be a spillover into Hong Kong and potentially even Japan, Korea and Australia?" asked Chris Weston, Melbourne-based chief strategist at IG Markets.

Most of Asia was in the red, with Hong Kong's China Enterprises Index (HSCE) leading the losses. South Korea's KOSPI (KS11) showed a 0.2 percent gain.

The MSCI Emerging Market index (MSCIEF) was up 0.2 percent

Wall Street had been mixed on Monday, with the S&P 500 (SpX) off a touch, the Nasdaq (IXIC) losing 0.1 percent and the Dow (DJI) up 0.1 percent.

In commodity markets, U.S. light crude (CLc1) was down 55 cents at $57.56 amid uncertainty over a possible extension of output cuts by major crude producers and expectations of higher supply as the Keystone pipeline restarts.

Brent crude futures (LCOc1) were down 54 cents to $63.30.

Spot gold <XAU=> inched lower to $1,293.11.

What the Central Banks Are Saying About Cryptocurrencies

Eight years since the birth of bitcoin, central banks around the world are increasingly recognizing the potential upsides and downsides of digital currencies.

The guardians of the global economy have two sets of issues to address. First is what to do, if anything, about emergence and growth of the private cryptocurrencies that are grabbing more and more attention -- with bitcoin now surging toward $10,000. The second question is whether to issue official versions.

Following is an overview of how the world’s largest central banks (and some smaller ones) are approaching the subject:

U.S.: Privacy Worry

The Federal Reserve’s investigation into cryptocurrencies is in its early days, and it hasn’t been overtly enthusiastic about the idea of a central-bank issued answer to bitcoin. Jerome Powell, a board member and the chairman nominee, said earlier this year that technical issues remain with the technology and "governance and risk management will be critical." Powell said there are "meaningful" challenges to a central bank cryptocurrency, that privacy issues could be a problem, and private-sector alternatives may do the job.

Euro Area: Tulip-Like

The European Central Bank has repeatedly warned about the dangers of investing in digital currencies. Vice President Vitor Constancio said in September that bitcoin isn’t a currency, but a “tulip” -- alluding to the 17th-century bubble in the Netherlands. Colleague Benoit Coeure has warned bitcoin’s unstable value and links to tax evasion and crime create major risks. President Mario Draghi said this month the impact of digital currencies on the euro-area economy was limited and they posed no threat to central banks’ monopoly on money.

China: Conditions ‘Ripe’

China has made it clear: the central bank has full control over cryptocurrencies. With a research team set up in 2014 to develop digital fiat money, the People’s Bank of China believes "conditions are ripe" for it to embrace the technology. But it has cracked down on private digital issuers, banning exchange trading of bitcoin and others. While there’s no formal start date for introducing digital currencies, authorities say going digital could help improve payment efficiency and allow more accurate control of currencies.

Japan: Study Mode

Bank of Japan Governor Haruhiko Kuroda said in an October speech that the BOJ has no imminent plan to issue digital currencies, though it’s important to deepen knowledge about them. “Issuing CBDC (central bank digital currency) to the general public is as if a central bank extends the access to its accounts to anyone,” Kuroda said. “As such, discussion about CBDC revisits fundamental issues of central banking.”

Germany: ‘Speculative Plaything’

In a country where lot of citizens still prefer to pay in cash, the Bundesbank has been particularly wary of the emergence of bitcoin and other virtual currencies. Board member Carl-Ludwig Thiele said in September bitcoin was “more of a speculative plaything than a form of payment.” A shift of deposits into blockchain would disrupt banks’ business models and could upend monetary policy, Thiele said. At the same time, the Bundesbank has been actively studying the application of the technology in payment systems.

U.K.: Potential ‘Revolution’

Bank of England Governor Mark Carney has cited cryptocurrencies as part of a potential “revolution” in finance. The central bank started a financial technology accelerator last year, a Silicon Valley practice to incubate young companies. Carney says technology based on blockchain, the distributed accounting database, shows “great promise” in enabling central banks to strengthen their defenses against cyber attack and overhaul the way payments are made between institutions and consumers. He has nevertheless cautioned the BOE is still a long way from from creating a digital version of sterling.

France: ‘Great Caution’

Bank of France Governor Francois Villeroy de Galhau said in June that French officials "advise great caution with respect to bitcoin because there is no public institution behind it to provide confidence. In history all examples of private currencies ended badly. Bitcoineven has a dark side -- there were this data attacks." He said "those who use Bitcoin today do so at their own risk."

India: Not Allowed

India’s central bank is opposed to cryptocurrencies given that they can be a channel for money laundering and terrorist financing. Nevertheless, the Reserve Bank of India has a group studying whether digital currencies backed by global central banks can be used as legal tender. Currently, the use of cryptocurrencies is a violation of foreign-exchange rules.

Brazil: Support Innovation

The Banco Central do Brasil sees “no immediate risk for the Brazilian financial system" but remains alert to the developments of the usage of those currencies, it said in a statement this month. The bank pledged “to support financial innovation, including new technologies that make the financial system safer and more efficient.”

Canada: Asset-Like

The Bank of Canada’s senior deputy governor, Carolyn Wilkins, who is leading research on cryptocurrencies, said in an interview this month that cryptocurrencies aren’t true forms of money. “This is really an asset, or a security, and so it should be treated that way,” Wilkins said. As others, she viewed distributed ledger technology as promising for making the financial system more efficient.

South Korea: Crime Watch

The Bank of Korea’s focus has been protecting consumers and preventing cryptocurrencies from being used as a tool of crime. Deputy Governor Shin Ho-soon said this month that more research and monitoring was needed.

Russia: ‘Pyramid Schemes’

Russia’s central bank has expressed concerns about potential risks from digital currencies, with Governor Elvira Nabiullina saying “we don’t legalize pyramid schemes” and “we are totally opposed to private money, no matter if it is in physical or virtual form.” For the moment, the Bank of Russia prefers to delay a decision on regulating the financial instruments unless President Vladimir Putin pushes for action sooner. The central bank will work with prosecutors to block websites that allow retail investors access to bitcoin exchanges, according to Sergey Shvetsov, a deputy governor.

Australia: Monitoring Closely

The Reserve Bank is closely monitoring the rise of digital currencies and recognizes the technology underpinning bitcoin has the "potential for widespread use in the financial sector and many other parts of the economy," head of payments policy Tony Richards said last month.

Turkey: Important Element

Digital currencies may contribute to financial stability if designed well, Turkish Central Bank Governor Murat Cetinkaya said in Istanbul earlier this month. Digital currencies pose new risks to central banks, including their control of money supply and price stability, and the transmission of monetary policy, Cetinkaya said. Even so, the Turkish central banker said that digital currencies may be an important element for a cashless economy, and the technologies used can help speed up and make payment systems more efficient.

Netherlands: Most Daring

The Dutch have been among the most daring when it comes to experimenting with digital currencies. Two years ago the central bank created its own cryptocurrency called DNBcoin -- for internal circulation only -- to better understand how it works. Presenting the results last year, Ron Berndsen, who was in charge of the project, said blockchain may be “naturally applicable” in the settlement of complex financial transactions.

Scandinavia: Exploring Options

Like the Dutch, some Nordic authorities have been at the forefront of exploring the idea of digital cash. Sweden’s Riksbank, the world’s oldest central bank, is probing options including a digital register-based e-krona, with balances in central-database accounts or with values stored in an app or on a card. The bank says the introduction of an e-krona poses "no major obstacles" to monetary policy.

In an environment of decreasing use of cash, Norway’s Norges Bank is looking at possibilities such as individual accounts at the central bank or plastic cards or an app to use for payments, it said in a May report. Denmark has backtracked somewhat from initial enthusiasm, with Deputy Governor Per Callesen last month cautioning against central banks offering digital currencies directly to consumers. One argument is that such direct access to central bank liquidity could contribute to runs on commercial banks in times of crisis.

New Zealand: Considering Future

The Reserve Bank of New Zealand, once a pioneer on the global stage with its early introduction of an inflation target, said Wednesday it’s considering its future plans for currency issuance, and how digital units may fit into those strategies. “Work is currently underway to assess the future demand for New Zealand fiat currency and to consider whether it would be feasible for the reserve bank to replace the physical currency that currently circulates with a digital alternative,” the RBNZ said in what it termed an analytical note.

Morocco: Violating Law

Representing one of the more stringent reactions, the country has deemed that all transactions involving virtual currencies as violating exchange regulations and punishable by law. Cryptocurrencies amount to a hidden payment system, not backed by any institution and involving significant risks for their users, authorities said in a statement this month.

Bank for International Settlements: Can’t Ignore

The central bank for central banks has said that policy makers can’t ignore the growth of cryptocurrencies and will likely have to consider whether it makes sense for them to issue their own digital currencies at some point. “Bitcoin has gone from being an obscure curiosity to a household name,” the BIS said in September. One option is a currency available to the public, with only the central bank able to issue units that would be directly convertible to cash and reserves. There might be a greater risk of bank runs, however, and commercial lenders might face a shortage of deposits. Privacy could also be a concern.

Asia stocks hit by China, South Korea weakness, euro at 2-month high

Asian stocks surrendered early modest gains and retreated from a decade high on Monday, weighed by weakness in the Chinese and South Korean markets, while the euro reached a two-month top against the dollar.

Spreadbetters expected Asia's equity weakness would spill over into Europe, forecasting Britain's FTSE, Germany's DAX and France's CAC to each open about 0.1 percent lower.

MSCI's broadest index of Asia-Pacific shares outside Japan rose early in the session on Friday's Wall Street gains, but was last down 0.9 percent.

The index rose to its highest since 2007 on Thursday as equity markets have enjoyed strong support this year thanks to corporate earnings rising on the back of an improving global economy.

Shanghai shares were down 0.9 percent, reaching a three-month low.

Chinese shares were already on a shaky footing after last week, hurt by a rout in the domestic bond market and fresh moves to reduce risks in the asset management industry that may bring a sea change for banks. (SS)

South Korea's KOSPI fell 1.4 percent as tech shares slumped following an analyst's report suggesting the memory chip "super cycle" would soon fade, led lower by Samsung Electronics (KS:005930). (KS)

Strength in tech shares pushed the S&P 500 and Nasdaq to record highs on Friday but observers noted that demand for tech-related products such as semiconductors could eventually slacken.

Japan's Nikkei pared earlier gains and fell 0.3 percent with chip makers suffering losses. (T)

"Global sales of semiconductors expanded greatly in the third quarter. But demand could slow in the fourth quarter as a reaction to this sharp increase, and there are warning signs such as reversals in price trends," wrote Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities in Tokyo.

In currencies, the euro was little changed at $1.1926 after nudging up to $1.1946 earlier, its highest since Sept. 22.

The common currency rode on momentum from Friday after data showed German business confidence hit a record high in November, a sign the European Union's largest economy is on track for a boom.

The euro was also helped by Germany's Social Democrats' agreement on Friday to hold talks with Chancellor Angela Merkel on renewing their outgoing coalition government.

Political uncertainty in Germany stemming from Merkel's apparent failure to form a governing coalition talks knocked the euro early last week.

The euro's strength kept the dollar's index against six major rivals at 92.805, not far from a two-month low of 92.675 plumbed on Friday.

The dollar lost 0.1 percent to 111.415 yen.

The Australian dollar dipped 0.2 percent to $0.7605 after rising nearly 0.75 percent the previous week.

The New Zealand dollar rose 0.2 percent to $0.6861, recovering some of Friday's losses.

"Commodity and emerging market currencies are likely to remain firm if persisting dollar weakness supports global commodity prices," said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.

U.S. crude lost a bit of steam and was last down 26 cents at $58.69 per barrel, while Brent crude slipped 3 cents to $63.83.

U.S. crude oil futures rose to a 2-1/2-year high of $59.05 per barrel on Friday. A continued shutdown of a U.S.-Canada pipeline triggered supply concerns, while the prospect of OPEC extending production cuts when the group meets this week also boded well for oil. [O/R]

Copper on London Metal Exchange hit a one-month high of $7,024 a tonne amid signs of resilience in China's industrial sector that suggested a slowly cooling, but still healthy, appetite for metals. [MET/L]

China's industrial profits rose 25.1 percent year-on-year in October, compared with a 27.27 percent jump in September, buoyed largely by higher commodity prices.

Despite the modest slowdown, October's growth rate was still the second-highest for a single month this year.

Australia stocks lower at close of trade; S&P/ASX 200 down 0.06%

Australia stocks were lower after the close on Friday, as losses in the IT, Financials and Industrials sectors led shares lower.

At the close in Sydney, the S&P/ASX 200 declined 0.06%.

The best performers of the session on the S&P/ASX 200 were Mineral Resources Ltd (AX:MIN), which rose 7.89% or 1.480 points to trade at 20.230 at the close. Meanwhile,Aconex Ltd (AX:ACX) added 6.42% or 0.330 points to end at 5.470 and Japara Healthcare Ltd (AX:JHC) was up 3.85% or 0.080 points to 2.160 in late trade.

The worst performers of the session were Reliance Worldwide Corporation (Aust) Pty Ltd (AX:RWC), which fell 4.57% or 0.190 points to trade at 3.970 at the close. Link Administration Holdings Ltd (AX:LNK) declined 4.01% or 0.360 points to end at 8.620 andWebjet Ltd (AX:WEB) was down 3.17% or 0.310 points to 9.480.

Falling stocks outnumbered advancing ones on the Sydney Stock Exchange by 616 to 592 and 361 ended unchanged.

Shares in Mineral Resources Ltd (AX:MIN) rose to all time highs; up 7.89% or 1.480 to 20.230.

The S&P/ASX 200 VIX, which measures the implied volatility of S&P/ASX 200 options, was up 7.31% to 11.103.

Gold Futures for December delivery was down 0.01% or 0.09 to $1292.11 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in January rose 0.69% or 0.40 to hit $58.42 a barrel, while the January Brent oil contract fell 0.22% or 0.14 to trade at $63.41 a barrel.

AUD/USD was up 0.01% to 0.7626, while AUD/JPY rose 0.26% to 85.03.

The US Dollar Index Futures was up 0.04% at 93.08.

Asian shares off 10-year peak, China hits three-month low

Asian shares hovered below their 10-year peak on Friday while mainland Chinese shares dropped to three-month lows after big falls the previous day on concerns about fresh government steps to curb financial risks and rise in Chinese bond yields.

European stocks are expected to be little changed after the Thanksgiving holiday in the United States on Thursday, with spread-betters looking to a flat opening in major European stock indexes, including Britain's FTSE (FTSE), France's CAC (FCHI) and Germany's DAX (GDAXI).

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) was up 0.2 percent, as Hong Kong shares (HSI) bucked the softness in the mainland shares to gain 0.6 percent.

The MSCI index hovered still just 0.3 percent below its 10-year peak hit earlier this week and is on course to post a weekly gain of 1.4 percent.

Japan's Nikkei (N225) ended up 0.1 percent after a market holiday on Thursday while U.S. stock futures (ESc1) were little changed after shortened trading on Thursday.

"Many markets have been hitting new highs so there should be some profit-taking and I wouldn't worry too much. Still, in the very near term, we could be in a phase where patience is needed," said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

Although solid global economic growth and strong corporate earnings have underpinned shares in Asia and many other parts of the world, a tumble in mainland Chinese shares caught some investors' attention.

The CSI300 index (CSI300) fell as much as 0.9 percent to a three-month low in choppy trade after a 3.0 percent fall - its biggest in almost a year-and-a-half - on Thursday, as a sell-off in domestic bonds that has been underway since last month gnawed away at investor sentiment.

In late trade, the index was almost flat.

Investors were also reacting to new policies aimed at curbing micro-lending and tightening regulation of asset management businesses.

The start-up board Chinext Index (CHINEXTP) hit its lowest level since mid-August and last stood down 0.3 percent, ahead of potential swell in selling of small shares in the next couple of months from institutional investors after their IPO (Initial Public Offering) lock-up period ends.

"The market is hit by concerns on the demand-supply balance. But there aren't any major worries in terms of fundamentals," said Naoki Tashiro, president of TS China Research.

Earlier this month Chinese stocks had risen almost 15 percent from their lows hit in May, and analysts said some investors were selling to lock in profits.

"We have seen a bull run in blue-chips this year. But no matter how good a company is, its price cannot go up forever," said Wu Kan, head of equity trading at Shanshan Finance.

In the currency market, the U.S. dollar remained under pressure after the minutes from the U.S. Federal Reserve's latest policy meeting highlighted concern among some of the board members over persistently low inflation.

"The Fed funds futures market has rolled back expectations on future rate hikes a bit after the minutes. One key focus going forward would be Powell's hearing in the Senate on Tuesday," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

The euro traded at $1.1846, near its one-month high of $1.1862 set on Nov. 15 and on track to mark its third consecutive week of gains despite failure of coalition talks in Germany earlier this week.

The leader of country's Social Democrats is coming under growing pressure to drop his opposition to a new "grand coalition" with Chancellor Angela Merkel's conservatives, with senior politicians arguing the party had a duty to promote stability.

The dollar fell to a two-month low of 111.07 yen on Thursday and last traded at 111.52 yen .

A weaker dollar saw the British pound staying near a six-week high against the dollar ahead of British Prime Minister Theresa May's visit to Brussels later in the day for talk on Brexit.

The pound last traded at $1.3295 , a tad below Thursday's six-week high of $1.3337.

U.S. crude futures hit a two-year high on the shutdown of Keystone pipeline, a major crude pipeline from Canada to the United States.

U.S. West Texas Intermediate (WTI) crude futures were at $58.42 a barrel at 0645 GMT, up 35 cents, or 0.6 percent from their last settlement. They reached a high of $58.58 a barrel early on Friday, the highest level since July 1, 2015.

International benchmark Brent futures (LCOc1) held firm at $63.41, down 0.2 percent on the day.

In a sign of a tightening market, both crude benchmarks are in backwardation, where spot prices are higher than those for future delivery, which makes it unattractive for traders to store oil for later sale.

Oil Prices Stay Higher as U.S. Crude Stocks Drop 1.9M Barrels Last Week

Oil prices held on to most of their gains on Wednesday, with the U.S. benchmark staying close to its best level since July 2015 after data showed U.S. crude stockpiles dropped last week.

U.S. West Texas Intermediate (WTI) crude futures were at $57.55 a barrel, up 72 cents, or about 1.2%, by 10:35AM ET (1535GMT). Prices were at around $57.70 prior to the release of the inventory data. It touched its highest level since July 2015 at $58.05 earlier in the session.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., rose 24 cents, or around 0.4%, to $62.83 a barrel.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 1.9 million barrels in the week ended Nov. 17. That compared with analysts' expectations for a decline of 1.5 million barrels, while the American Petroleum Institute late Tuesday reported a supply-drop of 6.4 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 1.8 million barrels last week, the EIA said.

Total U.S. crude oil inventories stood at 457.1 million barrels as of last week, which the EIA considered to be at the upper half of the average range for this time of year.

U.S. crude oil imports averaged 7.9 million barrels per day last week, down by 25,000 barrels per day from the previous week.

The report also showed that gasoline inventories remained largely unchanged, compared to expectations for a gain of 0.8 million barrels. For distillate inventories including diesel, the EIA reported a gain of 0.3 million barrels.

Oil prices ended higher on Tuesday amid expectations that oil producing countries will agree to extend an output cut at their meeting at the end of this month.

Top crude exporter Saudi Arabia is lobbying oil ministers to agree next week on a nine-month extension to OPEC-led supply cuts, sources familiar with the matter said, as Riyadh seeks to ensure a price-sapping glut is eradicated.

The Organization of the Petroleum Exporting Countries (OPEC), together with a group of non-OPEC producers led by Russia, has been restraining output since the start of this year in a bid to end a global supply overhang and prop up prices.

The deal to curb output is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss the outlook for the policy.

In other energy trading, gasoline futures inched up 0.4 cents, or 0.3%, to $1.767 a gallon, while heating oil shed 0.3 cents to $1.932 a gallon.

Natural gas futures dropped 4.7 cents, or 1.5%, to a three-week low of $2.970 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day.

The report comes out one day ahead of its normal release time due to the Thanksgiving holiday.

Dollar dumped, bonds buoyant on Fed inflation caution

The dollar was on the defensive Thursday after suffering its worst drubbing in five months while bonds celebrated a comeback on speculation the Federal Reserve might not tighten U.S. policy as aggressively as previously thought.

Moves in Asian share markets were mostly minor with Japanese markets closed for a holiday and the United States off for Thanksgiving. Spreadbetters pointed to a slightly easier opening for the major European bourses.

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) eked out a fresh 10-year peak with a rise of 0.15 percent, as did Hong Kong's main index (HSI).

The dollar's rout came after minutes of the Fed's last meeting showed "many participants" were concerned inflation would stay below the bank's 2 percent target for longer than expected.

That echoed comments from Fed Chair Janet Yellen that she was uncertain about the outlook for inflation and led markets to pare back pricing for more hikes next year.

While a move in December to between 1.25 and 1.5 percent is still almost fully priced in, Fed fund futures <0#FF:> rallied to show rates at just 1.75 percent by the end of next year.

"The US dollar was already staggering into Thanksgiving when the FOMC minutes gave it another shove," said Sean Callow, a senior currency analyst at Westpac. "The FOMC seems to be increasingly uneasy about "ongoing softness" in inflation."

"Investors can be forgiven for wondering why they should buy more U.S. dollars if we are heading into a "Powell pause" in the first half of 2018," he added, referring to newly appointed Fed Chair Jerome Powell.

BONDS RALLY BROADLY

Against a basket of currencies, the dollar was huddled at 93.184 (DXY), having shed 0.75 percent overnight.

The euro was enjoying the view at $1.1834 after climbing from $1.1731 on Wednesday. The dollar also crumbled to 111.27 yen , near its lowest since Sept. 20. The overnight move was the largest single-day fall against the yen since May.

The Fed's dovish turn helped break the inexorable sell off in short-term U.S. Treasuries, with yields on the two-year note falling almost five basis points to 1.727 percent. That was the sharpest daily drop since early September.

The rally spilled over into Asia, where Australian 10-year bond yields (AU10YT=RR) fell to their lowest since June and dealers expected European bonds to follow as well.

Wall Street had been an oasis of calm in comparison with the Dow (DJI) off 0.27 percent, while the S&P 500 (SPX) lost 0.08 percent and the Nasdaq (IXIC) added 0.07 percent.

Verizon (N:VZ) and AT&T (N:T) rose 2.0 percent and 1.6 percent respectively on bets they will benefit from the U.S. government's plan to rescind net neutrality rules put in place by the Obama administration.

Commodities were buoyed by the dive in the dollar, with gold up at $1,290.02 an ouncehaving added 0.9 percent overnight.

Oil prices paused after hitting their highest in more than two years after the shutdown of one of the largest crude pipelines from Canada cut supply to the United States. [O/R}

U.S. crude futures (CLc1) eased back 12 cents to $57.90 a barrel, after jumping 2 percent on Wednesday to ground last trod in mid-2015. Brent crude (LCOc1) dipped 18 cents to $63.14 a barrel.

Stocks rally on boost from strong global growth, earnings

Asian shares joined a global rally to reach their highest in a decade on Wednesday as strong world growth and rising corporate profits lured hordes of investors into equities, while oil prices jumped closer to a recent 2-1/2 year top.

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) added 0.4 percent to Wednesday's 1.3 percent rise - the biggest gain in eight months, supported by energy and technology sectors.

The index has been on an uptrend most of this year, posting a monthly loss only once in 2017. For the year so far, it is up about 33 percent, on track for its best annual performance since a 68 percent jump in 2009.

Hong Kong's Hang Seng index (HSI) is up 35.5 percent year-to-date while China's CSI 300 (CSI300) has risen 27.4 percent so far in 2017.

Pointing to a positive start for European and U.S. shares, both FTSE futures (FFIc1) and S&P E-mini futures inched higher. The S&P 500 (SPX) had closed at a record high on Tuesday.

"These returns underscore the synchronized, above-trend global economic expansion and robust earnings growth in emerging market (EM) countries, led by Asia," said Andrew Swan, head of Asian and global EM equities at BlackRock Investment.

"We believe these factors still have the potential to propel stock prices even higher, though not at the current rate or in a straight line."

Every Asian stock market was in the black on Wednesday, a rare occurrence. Japan's Nikkei <.N2256> was up 0.5 percent, South Korea's KOSPI (KS11) climbed 0.4 percent and Australia's benchmark S&P/ASX 200 index (AXJO) inched higher towards critical chart level of 6,000 points.

A strengthening global economy has fed an insatiable appetite for equities this year, with Asia's trade-dependent nations enjoying robust overseas sales in a boon to corporate earnings.

But some money managers are starting to feel the jitters as the bullish consensus grows, among them French investment house Societe Generale (PA:SOGN).

"A low volatility... with rather an extreme positioning is a dangerous combination, which we recently likened to dancing on the rim of a volcano," SocGen said in a note, predicting the S&P 500 will fall back to 2,000 by 2019 from 2,599 now.

Some equity investors are worried a U.S. rate hike next month and further tightening in 2018 could dampen the mood.

The U.S. Treasury yield curve has flattened to its lowest in a decade as benign inflation and hunger for yield have supported longer-dated debt. Benchmark 10-year note yields (US10YT=RR) have inched lower to 2.35 percent.

But yield on the 2-year Treasury is at the highest since 2008 (US2YT=RR) and set to surpass those on Australia's 2-year government bonds (AU2YT=RR) for the first time since December 2000.

In currencies, the U.S. dollar (DXY) was generally on the back foot against major rivals, falling for a second straight day on the Japanese yen .

The Australian dollar slipped to $0.7562 , not far from a five-month trough of $0.7532 touched on Tuesday, as the Aussie's attraction as a carry trade was undermined by higher short-term U.S. yields.

The euro was steady at $1.1744, drifting away from a recent one-month peak of $1.1860.

In commodities, oil prices rose as ongoing cuts in piped Canadian crude to the United States added to falling U.S. crude inventories, while expectations of a prolonged OPEC-led production cut also offered support. [O/R]

U.S. light crude (CLc1) added 86 cents to $57.69 while Brent crude (LCOc1) climbed 43 cents to $63, not far from a near 2-1/2 year peak of $64.65 touched earlier this month.

Copper futures extended gains for a fourth straight day, while spot gold was barely changed at $1,281.62.

Oil prices jump on Canadian pipeline disruption to United States

Oil prices jumped by 1 to 2 percent on Wednesday as ongoing cuts of piped Canadian crude to the United States added to falling U.S. crude inventories, while expectations of a prolonged OPEC-led production cut also offered support.

U.S. West Texas Intermediate (WTI) crude futures were at $57.96 a barrel at 0753 GMT, up $1.13, or 2 percent from their last settlement.

Brent crude futures, the international benchmark for oil prices, were at $63.30 per barrel, up 73 cents, or 1.2 percent.

Traders said the firm price lift was due to drop in crude supplies from Canada to the United States.

TransCanada Corp said it will cut deliveries by at least 85 percent on its 590,000-barrel-per-day (bpd) Keystone crude pipeline through the end of November. The pipeline, which links Alberta's oil sands to U.S. refineries, was shut last week after a 5,000-barrel spill in South Dakota.

Traders said there was also some price support from a weekly report on Tuesday by the American Petroleum Institute which said U.S. crude inventories fell by 6.4 million barrels in the week to Nov. 17.

The latest official U.S. production and inventory data is due on Wednesday.

Outside North America, markets have been supported by an effort led by the Organization of the Petroleum Exporting Countries (OPEC) to restrain output to end a global supply overhang.

The deal to curb production is due to expire in March, but OPEC will meet on Nov. 30 in Vienna to discuss the outlook for the policy.

"There is growing consensus that OPEC will extend their production cut deal at the end of the month. This confidence along with the current geopolitical environment has kept ICE Brent trading firmly above $60 per barrel," Dutch bank ING said on Wednesday.

"However, an outcome at the OPEC meeting which falls short of market expectations, will likely lead to a selloff, and given the large speculative long in Brent, this could be fairly severe," it added.

J.P. Morgan said in its 2018 commodities outlook, released late on Tuesday, that "oil markets in 2018 will be balanced on the back of extended ... production cuts," but added that without extended cuts markets would be in surplus.

"We expect Brent to trade at the top of the $40 to $60 per barrel range, with Brent averaging $58 per barrel in 2018," the U.S. bank said. "WTI is expected to average $54.6 per barrel.