Oil is taking a hit after US inventories gain while Putin says prices are ‘absolutely fine’

Russian
Prime Minister Vladimir Putin smiles, with his face smeared with
crude oil, during a visit to a Lukoil oil
platform.

Reuters/RIA
Novosti

• Oil prices tumble yet again ahead of an OPEC meeting on
  December 6. Vladimir Putin said current prices are
  “absolutely
  fine.” WTI traded below $50 for the first time in over a
  year.
• Federal Reserve Chairman Jerome Powell said on
  Wednesday that rates are “just below” a neutral level, taken by
  investors as a sign that the rate hike
  agenda was nearing its end. That helped lift European
  shares on Thursday.
• US treasury yields and the dollar fell ahead of a
  crucial G20 summit in Argentina Friday. 

Brent Crude dropped back below $60 a barrel and is currently
trading at $58.14, down 1.6%, after data showed US inventories
continued to grow, while Russia
indicated it has limited interest in cutting supply.
Russian President Vladimir Putin said current prices are
“absolutely
fine” ahead of an important OPEC meeting December 6. WTI,
down 1.1%, traded below $50 for the first time in over a
year.

Falling oil prices could prompt world leaders to agree on
production policy at G-20 summit,
analysts told CNBC. The plunge in prices has added pressure
on the OPEC alliance to execute another round of supply
cuts.

Elsewhere in markets, Federal Reserve Chairman Jerome Powell’s
comments on interest rates gave a lift to US stocks on Wednesday
and to European equity indexes on Thursday. He said rates are
“just below” a neutral level, taken by investors as a sign that
the rate hike
agenda was nearing its end.

Asian stocks broadly rose on the news despite investor jitters
ahead of an important G20 summit Friday. Japan’s Nikkei finished
up 0.4%, following US gains on Wednesday, though the Shanghai
Composite Index was an outlier closing down 1%. MCSI’s broad
Asian index, excluding Japan, rose 0.6% and is currently up
0.2%. 

The Euro Stoxx 600 was up 0.6% as of 10.00 a.m in London (5 a.m
EST). France’s CAC is up 0.7% and Germany’s Dax is is trading
0.5% higher.

Powell’s speech Wednesday also noted that there is “a great deal
to like” about the US economy, and added that the outlook remains
solid. His remarks sent the S&P 500 up 2.3% while the Nasdaq
rose 3% at the close Wednesday. US index futures are all trading
at least 0.3% lower on Thursday.

November’s losses were erased on the Dow Jones Industrial Average
– which climbed 600 points Wednesday – with investors expectant
that Powell’s comments suggested a slowing or stopping of the
Fed’s interest rate hikes. 

A Federal Reserve report out earlier Wednesday showed some
American businesses have the most debt in two decades. Still,
officials “see no major asset class where valuations appear far
in excess of standard benchmarks,” Powell said in his
speech.

US two-year treasury yields slipped to 2.813%.