Hong Kong (AFP) – Oil extended losses Wednesday after Donald Trump said Venezuela would turn over millions of barrels to the United States, while equities wobbled after a record-breaking start to the year. Crude has seen wild swings since the US president ordered the toppling Saturday of Nicolas Maduro, his counterpart in Caracas, and said Washington would run the country while demanding “total access” to its key resource. But it sank as much as two percent Tuesday and around one percent Wednesday after Trump announced the latest development.
“The Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America,” he wrote on his Truth Social platform. “This oil will be sold at its market price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States.” Analysts said the shipments lowered the risk that Caracas would have to cut output owing to its limited storage capacity, easing supply concerns, but added that the outlook for the commodity was lower prices. That comes as the crude market remains well stocked after OPEC+ agreed to boost output.
Venezuela sits on about a fifth of the world’s oil reserves, but observers pointed out that a quick ramp-up of output would be hamstrung by several issues including its creaking infrastructure, low prices and political uncertainty. Equity markets fluctuated after a strong start to the year that has already seen Seoul following London and New York in hitting record highs thanks to the relentless rush into all things artificial intelligence. South Korea’s Kospi index continued its run-up Wednesday, while Sydney, Singapore, Shanghai, Wellington and Jakarta also rose.
However, Hong Kong dipped along with Taipei and Manila, while Tokyo slid after China imposed tougher export controls on products sent to Japan with potential military uses. Still, despite rising geopolitical tensions, analysts remain upbeat about the outlook for equities this year. “Participants remained squarely focused on what remains a robust bull case of resilient economic growth and robust earnings growth, largely in keeping with that which powered the market higher last year,” wrote Michael Brown at Pepperstone. He pointed to “expectations for considerably looser monetary and fiscal backdrops through the next twelve months.”
“My view remains that the ‘path of least resistance’ continues to lead to the upside, and that any dips — were they to occur — continue to represent buying opportunities.”
– Key figures at around 0230 GMT –
West Texas Intermediate: DOWN 1.2 percent at $56.47 per barrel
Brent North Sea Crude: DOWN 1.0 percent at $60.10 per barrel
Tokyo – Nikkei 225: DOWN 0.5 percent at 52,257.11 (break)
Hong Kong – Hang Seng Index: DOWN 1.0 percent at 26,431.70
Shanghai – Composite: UP 0.1 percent at 4,088.40
Euro/dollar: UP at $1.1700 from $1.1693 on Tuesday
Pound/dollar: UP at $1.3511 from $1.3503
Dollar/yen: UP at 156.68 yen from 156.59 yen
Euro/pound: UP at 86.60 pence from 86.58 pence
New York – Dow: UP 1.0 percent at 49,462.08 (close)
London – FTSE 100: UP 1.2 percent at 10,122.73 (close)
© 2024 AFP
