Oil prices dove on Thursday as the United States weighed its largest-ever drawdown from its oil reserves, while Asian stocks fell as China reported weak manufacturing data and uncertainty over the war in Ukraine dragged on.
The United States is considering releasing up to 180 million barrels of oil over several months from strategic reserves, four US sources said, as the White House tries to lower fuel prices that have surged since Russia invaded Ukraine late last month.
Brent crude futures were down 4.9 percent at $107.89 a barrel and US crude futures fell more than 5 percent to $101.37 a barrel by midday.
Lower oil prices looked set boost European and US markets at the open with European futures rising 0.49 percent, Germany’s DAX futures gaining 0.61 percent, Nasdaq futures up 0.4 percent and S&P500 futures 0.15 percent higher.
But shares in Asia were hurt by data showing that activity in China’s the factory and services sectors swung into negative territory in March, contracting simultaneously for the first time since the peak of the country’s COVID-19 outbreak in 2020.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.56 percent, led by a 1 percent drop for Hong Kong’s Hang Seng Index, and a 0.77 percent decline for Chinese blue chips.
“The sharp declines (in activity) were largely due to the surging Omicron transmission and corresponding stringent measures in major cities,” Chaoping Zhu, a global market strategist for J.P. Morgan Asset Management in Shanghai said in a note, adding that the financial pressures this puts on businesses and households means investors can expect “further monetary supportive measures”.
The euro held at a one-month high against the dollar on Thursday, having rallied on hopes the war in Ukraine might be entering a new de-escalating phase, while the yen was set for its worst month since November 2016. – Reuters
