Logo of Phnom Penh Post newspaper Phnom Penh Post - Crude, equities advance on optimism for recovery

Crude, equities advance on optimism for recovery

Content image - Phnom Penh Post
Oil prices surged as ministers from OPEC and its allies considered lifting output. AFP

Crude, equities advance on optimism for recovery

Oil prices rallied on June 1 on demand optimism before the latest Opec output meeting, while equity markets mostly rose despite resurfacing concerns over high inflation that could tighten global interest rates, hampering economic recovery.

Inflation in the eurozone jumped to the highest level since October 2018 as Covid restrictions across Europe were scaled back, boosting the economy and stoking energy prices, official data showed.

Consumer prices in the 19 countries that use the euro rose by 2.0 per cent year-on-year, beyond the target of the European Central Bank (ECB), the EU’s Eurostat agency said.

“Most of the rise is due to temporary factors, including higher energy inflation, and we expect the headline rate to drop back to well below the ECB target next year,” noted Andrew Kenningham, chief Europe economist at Capital Economics research group.

The euro traded mixed on the data, while eurozone stock markets rallied.

London stocks, resuming trade after a long holiday weekend in the UK, were also higher, with shares in heavyweight oil and mining groups in demand on rising commodity prices.

Sterling meanwhile hit $1.4248 – its highest level versus the dollar since April 2018 – on UK growth optimism.

Oil prices powered higher ahead of a monthly gathering of Opec and allies, with expectations that they will begin to lift output from next month as they grow confident the world economy is well on the recovery track and demand will improve further.

Brent North Sea crude reached $71 per barrel – the highest point since October 2018.

And analysts expect more gains for global equities in the short term but warn the road will be bumpy as inflation spikes – owing to a strong recovery in activity, supply issues, bottlenecks and a low base of one-year comparison.

The rollout of vaccines around the world has allowed leaders of key economies including the US and Europe to wind back the containment measures that sparked a recession last year.

That, combined with mind-boggling government spending splurges and central bank largesse, has been crucial to a rally in global equities from their March 2020 lows to record or multi-year highs.

MOST VIEWED

  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • Cambodia purchases 4 million Molnupiravir tablets

    Cambodia has arranged for the purchase of four million US-made Molnupiravir pills – enough to treat 100,000 Covid-19 patients – even though the current rate of daily infections in Cambodia remains low. The medicine will be distributed to state hospitals, pharmacies and private clinics, according to the Samdech

  • Rise in planned flights lifts travel hopes

    Six airlines have applied to resume flights in December, while two others have put in for additional flights and routes, according to State Secretariat of Civil Aviation (SSCA) head Mao Havannall on November 29. These account for 43 new weekly domestic and international flights in December, up 16

  • Is Cambodia’s travel sector in for another cheerless holiday season?

    The travel and tourism sector was heaving back to life as borders started to reopen, promising a festive vibe for the holidays and New Year. But Omicron and other Covid-related issues are threatening to close the year on a bleak note ‘Seems [like] Covid-19 won’

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • Cambodia planning new border checkpoint at Thma Da

    Cambodia is looking into the possibility of opening a new Thma Da Border Checkpoint with Thailand to boost trade and tourism. The Ministry of Public Works and Transport said on December 4 that Minister of Public Works and Transport Sun Chanthol led a technical working group