Oil output hopes boost European stocks

London / AFP

European stocks rebounded on Wednesday, brushing aside a broad retreat across Asia, as oil prices pushed higher and Deutsche Bank shares rose, recouping some of their previous days’ losses.
London’s benchmark FTSE 100 index increased by 0.6 percent. In the eurozone, Frankfurt’s DAX 30 was up 0.7 percent at the close the Paris CAC 40 gained 0.8 percent on the day.
Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, said traders were closely watching an OPEC meeting in Algiers Wednesday to tackle a global supply glut.
“Although an agreement to curb output today would be a major surprise, the debate may pave the way for a potential deal at their next meeting,” she said.
Oil prices rebounded, — with benchmark Brent North Sea crude up 0.2 percent at $46.15 a barrel, — sending US stocks moderately higher after opening.
But as oil came off its highs, Wall Street became jittery, sliding into mildly negative territory.
Dealers said US stock investors were also hoping for hints on the timing of a Federal Reserve interest rate rise with Fed boss Janet Yellen scheduled to speak to a House committee.
Crude prices slumped Tuesday as Iran ruled out an imminent agreement with other major oil producers to even maintain current output levels, let alone trim them back, amid regional rivalry with Saudi Arabia.
Excess oil supplies have weighed heavily on prices since 2014.
As the informal OPEC meeting got underway, hosts Algeria called for action on the supply glut and for higher investment.
“We must act on supply to re-stabilise the market,” Algerian Energy Minister Noureddine Boutarfa said.
“Oil prices have been particularly volatile as of late as traders have sought to pick apart comments from OPEC members and other large oil producers and determine whether a deal on an output freeze is any more likely than it’s been in the past,” said Oanda market analyst Craig Erlam.
“Producers have made every effort to talk up a deal in recent weeks and at times markets have taken the bait but it looks as though once again they’re going to fall short.”
Shares in Deutsche Bank rose over 3 percent in mid-afternoon trading, before settling at a rise of around 1.5 percent, as the German government and bank sought to quash speculation of a rescue plan for the troubled lender.
Its shares sank to a record low this week on reports that Germany’s biggest bank had asked Berlin for help after US authorities demanded a $14-billion fine over the subprime mortgage crisis.
On the corporate front, sports gear giant Nike shares dropped nearly three percent after its fiscal first-quarter report showed slumping orders and mounting inventory.
And investors cheered news that ailing Canadian smartphone pioneer BlackBerry would stop making its own handsets and outsource the job to an Indonesian company, pushing its shares 3.6 percent higher.
Elsewhere, Tokyo’s Nikkei stocks index closed down 1.3 percent, with a stronger yen dampening buying appetite.