Crude futures rose on Wednesday for the first time in eight days, with U.S. oil pulling further away from the widely watched $30-per-barrel level breached the previous session. Investors were weighing the latest company earnings and economic news from of China.
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It means China – the world’s second-biggest oil consumer – may be set to overtake the United States as the world’s largest importer.
The Dow Jones industrial average sank 364 points, or 2.2 percent, to 16,151.
A bearish report from the U.S. Energy Information Administration on Tuesday underlined concerns that demand is stagnating as more supply comes to market.
WALL STREET: Shares were lower for most of the day but then regained lost ground in the last hour of trading.
Lance Kawaguchi, managing director and global sector head for the resources and energy group at HSBC, said the pain from slumping oil prices was spreading to the broader energy sector. Williams Cos. tumbled $2.58, or 15.6 percent to $13.96. The European benchmark crude ended the session at a premium of 42 cents to WTI. The contract fell 69 cents to settle at $30.86, after bottoming at $30.34, on Tuesday. The last time the market had one was last August. Copper fell 0.1 per cent to $4,386 a tonne after earlier dropping as low as $4,330.
DRIVING DIVIDEND: General Motors rose 0.9 percent after the automaker raised its dividend and added to its stock repurchase program.
Airlines, big users of jet fuel, have posted record profits, and shippers and other businesses are also saving from cheaper energy. It’s since clawed back some ground to trade at 1.4 percent higher at $30.89 a barrel. The stock gained $1.82 to $43.81.
CHINA TURMOIL: After a tumultuous start to the year for Chinese stocks and the yuan, both those markets showed tentative stability, likely at least partly due to government efforts to control fluctuations in the yuan.
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Last month, China said it plans further reforms to retail fuel pricing as part of moves to make prices more market-driven. The data suggest a weakening in the yuan may be helping boost demand for Chinese products, providing welcome support for the slowing economy. Australian stocks.AXJO eked out a 0.4 percent rise while South Korea.KS11 put on 0.7 percent. The FTSE 100 of leading British shares gained 0.5 percent. The Shanghai Composite yoyo’d in and out of negative territory and closed down 2.4 percent at 2,949.60. Japan’s Nikkei 225 Index surged up by 2.9 percent, while Hong Kong’s Hang Seng Index jumped by 1.1 percent. “The prospect of higher interest rates and tougher lending conditions will likely limit the availability of capital for many smaller producers, giving rise to distressed asset sales and consolidation of acreage holdings by more financially sound firms”, the agency said. Prices lost 30 percent a year ago.
