Oversupply angst drags oil lower, stocks drift near highs

Oversupply angst drags oil lower, stocks drift near highs

NEW YORK (Reuters) – Oil prices fell sharply on Tuesday on oversupply concerns while a gauge of stocks across the globe was on track to rise for a seventh straight session after large overnight gains in Asia.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., November 18, 2019. REUTERS/Brendan McDermid

The U.S. benchmark S&P 500 index was little changed while the blue-chip Dow Jones Industrial Average slipped and the Nasdaq rose, all having hit record intraday highs earlier in the session.

Traders cited the lingering uncertainty over whether the U.S. and China could agree to end a trade war than nears 1-1/2 years as a reason for stocks to drift and bond prices to go higher.

U.S. President Donald Trump said he would raise tariffs on Chinese imports if no deal is reached with Beijing to end the trade war. The next round of tariffs is due to kick in mid-December.

Oil fell after sources told Reuters that Russia is unlikely to agree to further cut its oil output at a meeting with fellow exporters next month.

Separately, Norway’s October oil production beat forecasts and the potential oversupply, combined with some worries over global demand next year, sent prices lower.

“Moreover, Russia also failed to fulfill its agreed cuts in November so far,” Commerzbank analyst Carsten Fritsch said.

U.S. crude CLc1 fell 3.31% to $55.16 per barrel and Brent LCOc1 was last at $60.84, down 2.56% on the day.

On Wall Street, the Dow Jones Industrial Average .DJI fell 91.08 points, or 0.32%, to 27,945.14, the S&P 500 .SPX gained 1.08 points, or 0.03%, to 3,123.11 and the Nasdaq Composite .IXIC added 32.01 points, or 0.37%, to 8,581.94.

Hopes of a trade truce earlier in the day drove European stocks to a four-year high and world stocks to their highest in nearly two years, but those gains were pared later in the session.

The pan-European STOXX 600 index lost 0.12% and MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.05% and was on track for a seventh straight session of gains.

Emerging market stocks rose 0.41%. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.62% higher, while Japan’s Nikkei .N225 lost 0.53%.

Long-dated U.S. Treasury yields slipped for the seventh straight day as risk appetite weakened.

Benchmark 10-year notes US10YT=RR last rose 7/32 in price to yield 1.7843%, from 1.808% late on Monday.

The 30-year bond US30YT=RR last rose 29/32 in price to yield 2.2527%, from 2.293% late on Monday.

The dollar was little changed against a basket of six major currencies. The dollar index .DXY rose 0.05%, with the euro EUR= up 0.08% to $1.1079.

The Japanese yen strengthened 0.14% versus the greenback at 108.54 per dollar, while Sterling GBP= was last trading at $1.2916, down 0.28% on the day.

Spot gold XAU= rose 0.08% to $1,472.87 an ounce.

Copper CMCU3 rose 0.86% to $5,880.00 a tonne.

Three-month aluminum on the London Metal Exchange CMAL3 lost 0.06% to $1,737.00 a tonne.

Reporting by Rodrigo Campos; additional reporting by Stephanie Kelly, Saqib Iqbal Ahmed and Gertrude Chavez-Dreyfuss; Editing by Nick Zieminski

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