Stocks - Europe to Push Higher as Oil Prices Rebound

© Reuters.

By Peter Nurse 

Investing.com - European stock markets are set to push higher Friday, helped by a stronger tone in the energy sector after oil prices bounced back strongly, while traders continue to assess whether stimulus efforts will help ease the impact from the virus outbreak.

At 03:15 ET (0715 GMT), the DAX futures contract traded 360 points, or 4.2% higher. {{167|France's CACAC 40 futures were up 125 points, or 3.2%, while the FTSE 100 futures contract in the U.K. rose 112 points, or 2.2%. Futures on the pan-eurozone index, the Euro Stoxx 50, bounced 12 points, or 0.5%. 

Additionally, U.S. crude futures traded 4.6% higher at $27.09 a barrel, after soaring 24% Thursday. The international benchmark Brent contract rose 3.2% to $29.38, after jumping 14.4% on Thursday in its biggest one-day gain since September.

These gains followed U.S. President Donald Trump suggesting he may intervene in the price war between Saudi Arabia and Russia at an "appropriate time". 

Further support is coming from reports of a "phase 3" package of fiscal support being prepared in the U.S. by Senate Republicans worth around $1.2 trillion.

The Trump administration is considering a diplomatic push to get Saudi Arabia to reduce output and using the threat of sanctions on Russia to force them to also cut supply, the Wall Street Journal reported, quoting unidentified sources.

U.S. crude and Brent have both collapsed about 40% in the last two weeks since talks between the Organization of the Petroleum Exporting Countries and its allies, including Russia, broke down, resulting in Saudi Arabia ramping up supply.

As the week draws to an end, market participants are likely to take stock of the many and varied plans to stimulate the global economy given the destruction wrought by the coronavirus pandemic. 

An unprecedented 31 central banks have slashed interest rates -- and many of them have gone further, buying bonds, intervening in currency markets and setting up emergency loan programs for banks and companies.

Economic indicators are thin on the ground in Europe Thursday, although the release of the Bank of England’s Quarterly Bulletin, at 08:00 AM ET (1200 GMT), may be of interest given the central bank’s surprise interest rate cut Thursday.

Elsewhere, at 03:00 AM ET (0700 GMT), gold futures were up 1.5% to $1,501.40/oz, while EUR/USD traded at 1.0755, up 0.6% on the day.