US stocks climbed yesterday to approach a record peak, and European equity markets also advanced, thanks to strong gains in the energy sector as oil prices touched a three-week high.

Brent crude surged more than three per cent to $48.30, its highest level in nearly three weeks, as the dollar weakened and Opec appeared closer to agreement on an output cut when it meets next week. US crude was last up 2.7 per cent after hitting a three-week high.

Among US equities, the S&P energy index gained 1.9 per cent as the top-performing sector, helping to push the benchmark S&P 500 index just shy of its intraday record of 2,193,81 set on August 15. The advance put the index on pace to set a closing high.

“I am quite surprised to see oil moving higher – every time we get these discussions about Opec agreements and production cuts, they always fall apart, nobody sticks to them – the oil cartel is very shaky,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

“What ends up happening is you get people speculating, it pushes the prices up and then it ends up coming back down.”

The Dow Jones industrial average rose 48.01 points, or 0.25 per cent, to 18,915.94, the S&P 500 gained 11.17 points, or 0.51 per cent, to 2,193.07 and the Nasdaq Composite added 31.23 points, or 0.59 per cent, to 5,352.74. The Nasdaq hit an intraday record for a second day, reaching as high as 5,362.48, but market participants cautioned that volume was likely to be light this week ahead of the US Thanksgiving Day holiday on Thursday.

The climb in oil lifted European markets, with the STOXX Europe oil & gas index up 2.2 per cent. Europe’s index of leading 300 shares gained 0.3 per cent.

MSCI’s all-country world index advanced 0.6 per cent.

The dollar fell 0.3 per cent to 100.94 against a basket of major currencies, pausing after a 10-day streak that saw it gaining nearly five per cent.

In similar fashion, US Treasury yields, which have soared in the wake of the US election, declined from one-year highs as the recent selloff tempted some new buyers.

Benchmark 10-year note yields jumped as high as 2.36 per cent on Friday and were last up 4/32 in price to yield 2.3244 per cent.

Copper prices, which have risen on Donald Trump’s promise to spend heavily on infrastructure, were up 2.6 per cent at $5,566 a tonne on the prospect of better demand in top consumer China and on the dip in the greenback.

The pause in the US dollar rally helped gold bounce from a five-and-a-half-month low.

Spot gold was up 0.4 per cent at $1,213.27 an ounce.

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