As it happened: Oil rebounds 3% as OPEC+ weighs biggest output cut since 2020

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An industry survey released on Monday revealed that US manufacturing growth slowed in September to a two-year low. The Institute for Supply Management said its manufacturing index dropped 1.9 points to 50.9 percent.

Pound has jumped 1 per cent against US Dollar. Around 1430 GMT, the pound was at USD 1.1288. This is a two-week high.

WTI, the main US oil contract has jumped five per cent. Investors hope that  OPEC+ nations would make a big production cut at their meeting this week.

The Swedish Coast Guard has said that gas has stopped leaking from Nord Stream 1 pipeline.

"The larger leak is now no longer visible on the surface while the smaller one instead has increased slightly," the coast guard said in a statement.

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Stock markets in Europe sank on Monday due to fears over health of Credit Suisse bank. Investors are already on edge over worries that rising interest rates, aimed at fighting sky-high inflation, could spark recessions.

The company logged its highest ever monthly sales led by record sales of Nexon and Punch. However, investors were not enthused about the sales performance with the stock falling after four consecutive sessions of gains. Tata Motors share slipped up to 1.76 per cent to Rs 397.50 against the previous close of Rs 404.65 on BSE.  Market cap of the firm fell to Rs 1.33 lakh crore. 

Oil prices jumped more than 3% in Asian trade today, as OPEC+ considers cutting output by more than 1 million barrels a day, for its biggest reduction since the pandemic, in a bid to support the market.

India has slashed the base import prices of crude and refined palm oil, crude soya oil and gold as prices corrected in the world market.

The government revises base import prices of edible oils, gold and silver every fortnight, and the prices are used to calculate the amount of tax an importer needs to pay.

Japanese manufacturer' business mood worsened in the three months to September and corporate inflation expectations hit a record high, a central bank survey showed, as stubbornly high material costs clouded the outlook for the fragile economy.

Japan's manufacturing activity grew at its slowest pace since the start of last year in September as a slide in output and new orders intensified due to weakening demand from China, the United States and other trading partners.

Protesters march across London in a 'Just Stop Oil' environmental movement protest, calling for an end to the exploration and production of fossil fuels.

The demonstrators march across several locations before meeting in Parliament Square to 'occupy' Westminster.

he rally is one of several in London and elsewhere around Britain over the cost-of-living crisis. 

Ukraine’s energy company Naftogaz CEO Yuriy Vitrenko said on Saturday (October 1) that Ukraine increased its gas production by four percent.

“It is important for Ukraine to have more gas of its own. For Ukraine to be able to fulfil Ukrainian customers’ need of gas and heat,” Vitrenko told Reuters.

He also called recent ruptures on Nord Stream gas pipelines a "sabotage".

“We also see decrease in flows. We see some very hostile, not business-like behaviour of Gazprom,” he added.

Italy's Eni said it would not receive any of the gas it had ordered from Russia's Gazprom for delivery this weekend, although the firms said they were working to fix this.

Russian gas supplies through the Tarvisio entry point will be at zero for Oct. 1, Eni, the biggest importer of Russian gas in Italy, said in a statement on its website on Saturday.

The Italian group later added that it would not receive any of the requested imports for Oct. 2, and that the situation was expected to remain the same into Monday.

Moscow and several European countries, including Germany, have been at loggerheads over the supply of natural gas from Russia since the country's invasion of Ukraine in February.

The Indian government has cut a windfall tax on domestically produced crude oil to 8,000 rupees per tonne from 10,500 rupees per tonne from Sunday, after a decline in global oil prices.

India has also scrapped an export tax on jet fuel and halved export duties on diesel to 5 rupees per litre from Sunday, a government notification said.

As the  US market closed on Friday, the S&P and the Dow notched their third consecutive weekly declines. All three indexes posted their second straight monthly losses as inflation and recessionary fears continued to loom over the US economy. 

Despite volatile trading on Friday, oil prices recorded their first weekly rise in five days, supported by the likelihood that OPEC+ would decide to reduce crude supply when it meets on October 5. 

The price of a barrel of November Brent oil futures, which expire on Friday, dropped by 53 cents, or 0.6 per cent, to $87.96. At $85.11, the more active December contract had fallen $2.07. 

West Texas Intermediate (WTI) oil futures for the United States decreased by $1.74 or 2.1 per cent to $79.49. 

Both contracts increased by more than $1 during the trading session but fell when Reuters reported that OPEC's oil output increased in September to its highest level since 2020, exceeding a planned increase for the month.

Friday saw more declines on Wall Street and in global equities, while government bond rates and the dollar remained close to recent highs as higher-than-expected inflation brought to an end a disastrous third quarter for global markets. 

New personal consumption expenditures (PCE) price index data indicated an increase of 0.3 per cent last month following a decrease of 0.1 per cent in July. The U.S. Federal Reserve is monitoring this index as it contemplates more interest rate rises. In September, inflation in the eurozone reached a record high of 10 per cent, exceeding expectations, according to recent inflation figures.

Britain's housing market has been rocked by the UK government's costly budget, as retail banks pull mortgage rates in anticipation of more costly products, sparking fears of tumbling home prices.

Homebuyers are gripped by panic after the Bank of England declared it would not hesitate to lift its main interest rate in response to the government's anticipated borrowing splurge that many see as further fuelling sky-high inflation.

Natural gas prices, which are used to produce power, fertiliser, and CNG to fuel vehicles, increased sharply by 40 per cent on Friday to record highs in line with a global firming up of energy prices. 

An order from the Petroleum Planning and Analysis Cell of the Union oil ministry in India increased the price paid for gas generated from old fields, which account for around two-thirds of all gas produced in the nation, from USD 6.1 per million British Thermal Units to USD 8.57 per million BTUs (PPAC).

New York - Dow: DOWN 1.7 percent at 28,725.51 (close)

New York - S&P 500: DOWN 1.5 percent at 3,585.62 (close)

New York - Nasdaq: DOWN 1.5 percent at 10,575.62 (close)

London - FTSE 100: UP 0.2 percent at 6,893.81 (close)  

Frankfurt - DAX: UP 1.2 percent at 12,114.36 (close)

Paris - CAC 40: UP 1.5 percent at 5,762.34 (close)

EURO STOXX 50: UP 1.2 percent at 3,318.20 (close)

Tokyo - Nikkei 225: DOWN 1.8 percent at 25,937.21 (close)

Hong Kong - Hang Seng Index: UP 0.3 percent at 17,222.83 (close)

Shanghai - Composite: DOWN 0.6 percent at 3,024.39 (close)

Pound/dollar: UP at $1.1156 from $1.1117 on Thursday

Euro/dollar: DOWN at $0.9802 from $0.9816

Euro/pound: DOWN at 87.82 pence from 88.29 pence

Dollar/yen: UP at 144.80 yen from 144.46 yen

Brent North Sea crude: DOWN 0.6 percent at $87.96 per barrel

West Texas Intermediate: DOWN 2.1 percent at $79.49 per barrel

Global stocks finished mixed after another volatile week, with European bourses rallying despite troubling inflation data and Wall Street continuing to retreat.

Eurozone consumer prices skyrocketed by a record 10 percent in September, official data showed, reaching double digits amid soaring energy prices caused by Russia's war on Ukraine.

Stoked by a staggering 40.8 percent rise in energy prices, the yearly inflation rate in the 19-country single currency area hit its highest level since records began, according to Eurostat.

Nevertheless, markets in Paris and Frankfurt ended the day with gains of over one percent, pushing higher after recent losses.

London stocks also ended the day with a small gain as the British pound advanced again following the Bank of England's surprise intervention in the bond market Wednesday after sterling sank to an all-time low against the dollar.

"Sterling has been all over the place this week," said Fawad Razaqzada, analyst at City Index and Forex.com. "For traders, the pound is a confusing arena to be in right now."

A poll Friday showed 51 percent of people think new UK Prime Minister Liz Truss should quit after championing a large tax cut in a bid to boost the economy that drew an unusual public rebuke from the International Monetary Fund.

The controversial economic package, which will dramatically increase government borrowing, also unusually lacked an accompanying cost analysis forecast from the country's fiscal watchdog, the Office of Budget Responsibility.

Back in New York, major indices again finished decisively lower to conclude another difficult week defined by worries over inflation and the worsening Russia-Ukraine conflict.

Meanwhile, a closely-watched measure of US inflation released Friday showed the annual pace of price increases slowed slightly in August compared with the prior month. 

However, the inflation rate still exceeded analyst expectations, a dynamic that will likely keep the Federal Reserve on its current path to hike interest rates aggressively. The yield on the 10-year US Treasury note, a proxy for interest rates, rose closer to four percent.

In Asia, Shanghai dropped as data showed China's manufacturing and services sectors struggled again in September from Covid lockdowns in parts of the country that have battered the world's number-two economy.

There was also little reaction to news that Beijing would allow some cities to reduce mortgage rates for first-home purchases as it tries to support the property market.

Market sentiment continues to be eroded by rising fears about developments in the Ukraine war, as Russia  annexed four occupied regions of its neighbor Friday, with President Vladimir Putin threatening to use nuclear weapons to defend the territories.

Wall Street stocks ended decisively lower Friday to conclude another difficult week defined by worries over inflation and the worsening Russia-Ukraine conflict.

A closely-watched measure of US inflation released Friday showed the annual pace of price increases slowed slightly in August compared with the prior month. 

However, the inflation rate still exceeded analyst expectations, a dynamic that will likely keep the Federal Reserve on its current path to hike interest rates aggressively. The yield on the 10-year US Treasury note, a proxy for interest rates, rose closer to four percent.

Meanwhile, Russian President Vladimir Putin on Friday annexed four parts of Ukraine, staging a grand ceremony in Moscow hours after shelling killed 30 people in Ukraine's southern region of Zaporizhzhia in one of the worst attacks against civilians in months.

On Wall Street, the broad-based S&P 500 finished at 3,585.62, down 1.5 percent for the day and almost three percent for the week.

The Dow Jones Industrial Average shed 1.7 percent to close at 28,75.51, while the tech0rich Nasdaq Composite Index dropped 1.5 percent to 10,575.61.

Among individual companies, Nike plummeted 12.8 percent after reporting lower profits on Thursday as the company marks down less-desired merchandise in North America amid an inventory glut and shifting consumer market challenged by inflation.

Carnival dove 23.3 percent as the cruise company reported a quarterly loss of $770 million due to higher operating costs and expenses. Rival companies Norwegian and Royal Caribbean also fell sharply.

Stock markets fluctuated and the pound seesawed on Friday as investors tracked fresh growth and inflation data at the end of another turbulent week.

The pound jumped on revised figures showing the UK economy had avoided recession -- but it swiftly fell back on expectations of an eventual downturn owing to sky-high inflation.

According to official figures released on Friday, consumer prices in the Eurozone increased by a record 10 per cent in September as inflation hit double digits as a result of surging energy costs brought on by Russia's war in Ukraine. 

According to Eurostat, the annual inflation rate in the 19-country single currency area reached its highest level in records, propelled by a startling 40.8 percent increase in energy costs.

The economy shrank in the first half of this year, confirming concerns about a general downturn that might trigger a recession. At the same time, a measure that frequently indicates the rate of layoffs—the number of persons applying for unemployment benefits—fell to a five-month low. The decrease shows that businesses are keeping their employees despite the downturn in growth and that those who are let go swiftly find other employment.

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After official data on Friday revealed that the UK economy is not in recession as previously thought, the pound increased by one percent against the dollar. 

Sterling rebounded to $1.2229 after hitting a record low against the dollar on Monday near parity.

Wall Street ended sharply lower on worries that the Federal Reserve's aggressive fight against inflation could hobble the U.S. economy, and as investors fretted about a rout in global currency and debt markets.

With tech-related heavyweights Tesla Inc, Apple Inc, and Nvidia Corp, all slumping, the Nasdaq sank to near its lowest level of 2022, set in mid-June.

European Union countries have approved emergency levies on energy firms' windfall profits and launch talks on their next move to tackle Europe's energy crunch - possibly, a gas price cap.

Energy ministers from the 27 EU member countries are negotiating measures proposed by Brussels last week to attempt to contain an energy price surge that is stoking record-high inflation and threatening a recession.

Asian shares  were headed for their worst month since the onset of COVID-19, while jitters in currency and bond markets persisted over hawkish talk from central banks, worries about a global recession and rising geopolitical risk.

Street demonstrations have been held across France as schools and transport services were disrupted by the first major strike since Emmanuel Macron won re-election as president in April.

The Reserve Bank of India announced on Friday that it will be raising its benchmark repo rate by 50 basis points to 5.90 per cent in order to combat the growing inflation. This was the fourth time that the rates were increased since May mirroring the steps taken by major banks all around the world.  

Britain's economy grew in the second quarter as it did not shrink as previously estimated, according to revised official data Friday which eased recession fears. Gross domestic product expanded 0.2 percent in the three months to the end of June, upgraded from a modest 0.1-percent contraction, the Office for National Statistics said in a statement.

Wind turbine maker Siemens Gamesa will be the latest company to cut jobs as they have announced that around 2900 jobs will be slashed. Siemens Gamesa is set to slash 800 positions in Denmark, 475 in Spain and 300 in Germany, the German-Spanish company said in a statement.

Inflation continued to rise in Germany as it rose by around 10 per cent in comparison to the same month last year, according to official data. 

South Korea’s factory production has gone down for the second consecutive time in August - hinting at the negative impact of the war in Ukraine on global economy.

Tokyo stocks opened lower on Friday, extending falls on Wall Street where higher US Treasury yields, inflation and rising recession fears returned.

The benchmark Nikkei 225 index was down 0.58 percent, or 153.51 points, at 26,268.54 in early trade, while the broader Topix index dropped 0.43 percent, or 8.04 points, to 1,860.76. 

Oil prices settled lower on Thursday in choppy trading, rising above $90 per barrel and then retreating as traders weighed a worsening economic outlook against potential OPEC+ output cuts next week.

Brent crude futures settled down 83 cents at $88.49 per barrel, after rising as high as $90.12 during the session. U.S. crude futures for November settled 92 cents lower at $81.23 a barrel.

Leading members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have begun discussions about an oil output cut at their next meeting on Oct. 5, three sources told Reuters.

One OPEC source told Reuters a cut was "likely", while two other OPEC+ sources said key members had spoken about the topic.

Reuters reported this week that Russia is likely to propose that OPEC+ reduce oil output by about 1 million barrels per day(bpd).

"Right now, the oil market is teetering between the Fed-induced demand destruction and tight oil supplies," said Ryan Dusek, a director in the Commodity Risk Advisory Group at Opportune LLP.

UK Prime Minister Liz Truss has defended economic decisions her government recently took.

"Well, first of all, I understand that people are facing a difficult time. We're facing a global economic crisis caused by Putin's war in Ukraine. That's why the government has taken decisive action to help people with energy bills. If we hadn't acted, people would be facing bills of up to £6,000. Higher inflation and also a slowing economy. So that is why we've taken action that nobody will be paying a typical bill of more than £2,500. But also, we need to get the economy growing. That is an important priority. That's why we're reducing the tax burden. But on your point about interest rates, interest rates are a matter for the independent Bank of England,'' she said.

German inflation has reached highest level in last 25 years. The economy is predicted to contract next year.

Stock indexes in the US have opened lower (September 29) amid worries of global economic downturn. Dow Jones Industrial Average fell 170 points. The S&P 500 fell 32 points
 

On the back of economic measures taken by Bank of England, pound has clawed back some of the lost ground. However, European equities have fallen due to fears that rise in interest rates will spark global recession

Frankfurt stocks accelerated losses to shed 1.5 percent in value, while Paris fell 1.3 percent. 

London equities fell as the pound rebounded somewhat from earlier falls, one day after the BoE snapped up UK bonds to avert a risk to UK financial stability.