Oil prices rose yesterday after forecasts of lower United States inventories outweighed a pickup in output in Libya, and energy sector stocks helped keep Wall Street little changed.
Stocks edged higher and Treasury yields turned slightly positive as United States President Donald Trump said his administration is working on changes to bank regulations and his proposed infrastructure bill “may” top $1 trillion.
Political risks from a meeting between the US and Chinese leaders, as well as the upcoming French presidential election, kept investors cautious. Earlier, Treasury yields touched their lowest since late February and were not far from their lowest since November.
On Wall Street, indexes turned positive as Mr Trump laid out his plans, even if investors have grown weary of his administration’s ability to deliver on campaign promises after his effort to reform healthcare stalled in Congress.
Trade was high on investors’ minds yesterday ahead of a possibly contentious meeting between Mr Trump and Chinese President Xi Jinping, which Mr Trump expects “will be a very difficult one.”
“Investors are having to go through a period of realism,” said Jason Pride, director of investment strategy at Glenmede in Philadelphia.
“Much of what was proposed (by the Trump administration) was either not going to make it or be a watered down version or be greatly delayed,” he said.
The Dow Jones Industrial Average rose 31.04 points, or 0.15 per cent, to 20,681.25, the S&P 500 lost 0.91 points, or 0.04 per cent, to 2,357.93 and the Nasdaq Composite dropped 1.72 points, or 0.03 per cent, to 5,892.96.
Yesterday, the pan-European FTSEurofirst 300 index rose 0.22 per cent and MSCI’s gauge of stocks across the globe shed 0.03 per cent.
Emerging market stocks lost 0.13 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.38 per cent lower, while Japan’s Nikkei lost 0.91 per cent.
Both Brent and WTI crude were at their highest in nearly a month. They hit four-month lows in late March but have recovered eight per cent since then on expectations Opec and other producers would cut output under an agreement reached last year.
US crude rose 1.69 per cent to $51.09 per barrel and Brent was last at $54.19, up 2.01 per cent on the day.
The dollar edged up against a basket of major currencies but lost half a per cent against the safe-haven Japanese yen.
Gold, another safe haven asset, pared gains after hitting a one-week high.