The oil market could offer some necessary relief. Photo / File
The oil market could offer some necessary relief. Photo / File
Oil prices jumped more than 20 per cent on news Saudi Arabia and Russia may have reached a deal to scale back production, helping boost stocks on Wall Street and setting an upbeat tone for local markets.
The spot price of Brent crude oil rose as high as US$36.29 abarrel and was recently up 20.6 per cent at US$29.84 a barrel after US President Donald Trump tweeted about a deal between the oil-producing nations, saying he'd spoken to Saudi Crown Prince Mohammed bin Salman who'd talked to Russian President Vladimir Putin.
"I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!" Trump tweeted.
Wall Street was stronger, with the Dow Jones Industrial Average up 1.1 per cent at 8am in Wellington, the Nasdaq was up 0.6 per cent and the S&P500 rose 1.2. per cent.
That may set a positive tone for the local market, with ASX futures recently up 85 points at 5,221. The S&P/NZX 50 Index dropped 0.6 per cent yesterday.
Air New Zealand's battered shares may get some relief on news its cargo arm has secured an additional 22 flights for the delivery of high-value goods to Shanghai during the coming fortnight, although the prospect of higher oil prices won't do the airline any favours.
And investors weren't entirely convinced a deal was a certainty.
The Moscow Times reported the conversation between Putin and Mohammed bin Salman didn't take place, and Putin's spokesman Dmitry Peskov told Interfax news agency there were no plans for such talks
Stuart Ive, treasury manager at OMF, said the first thing he noted was that Trump said "if it happens," and that the rally would best be described as "fragile."
Investors also looked through weak US jobs figures ahead of the official data tonight.
In the week ending March 28, the advance figure for seasonally adjusted initial jobless claims was a record 6.6 million, doubling from the previous week's 3.3 million new claims.
ANZ Bank economist Liz Kendall said US non-farm payrolls data tonight may be soft. However, it's for early March and from before the intensification of the covid-19 crisis in the US.
US confirmed cases now stand at 234,462, according to data compiled by Johns Hopkins University, nearly double the number of cases in Italy and well above China's 82,432 confirmed cases. There have been 51,335 deaths across the globe.
Kendall said the most important piece of US data is the March non-manufacturing Institute for Supply Management index, which is forecast to fall to 43 from 57.3.
"The low for the index during the GFC was 37.8, so risk of a sharper drop is very real."
The New Zealand dollar, meanwhile, was trading at 59.08 US cents at 8am in Wellington versus 59.28 US cents at 5pm yesterday.
"The kiwi is holding up well even as the US dollar strengthens. Technical signals are mixed and we expect more range-trading," she said.
