Oil climbs back above US$100

Wall Street is extending a rally into a third day on Thursday even as oil prices jump back above US$100, upping the pressure on inflation.

The S&P 500 was 0.8 per cent higher, with 75 per cent of the stocks in the benchmark index rising. That follows gains of more than two per cent in each of the prior two days for its best back-to-back performance in nearly two years.

The Dow Jones Industrial Average was up 246 points, or 0.8 per cent, at 34,307, as of 2:35 p.m. Eastern time, and the Nasdaq composite was 0.9 per cent higher. All three indexes had wavered between small gains and losses in the morning, following better-than-expected reports on the United States economy.

They’re the latest swings for markets as investors struggle to handicap what will happen to the economy and the world’s already-high inflation because of Russia’s invasion of Ukraine, higher interest rates from central banks around the world, and renewed COVID-19 worries in various hotspots.

A barrel of US crude oil jumped 7.9 per cent to US$102.59, while Brent crude, the international standard, leaped 8.6 per cent to US$106.43 per barrel. Such moves have become the norm recently, as prices careen on uncertainties about both supplies of, and demand for, oil. After briefly topping US$130 early last week, a barrel of US crude went all the way down to nearly US$94 on Wednesday.

Dribbles of news about the state of negotiations between Russia and Ukraine have caused many of the sharp reversals. So too, recently, have worries about economic shutdowns in China because of surges in COVID-19 infections, which could hit demand for energy.

On Thursday, the Chinese government said companies in Shenzhen, a major business centre, will be allowed to reopen while efforts to contain coronavirus outbreaks progress. Their earlier closures had rattled financial markets. That followed a promise on Wednesday to “invigorate the economy” with market-friendly policies.

AP