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Oil prices down, Asian stocks up
The International Energy Agency releases 60 billion barrels from the reserves. After seven weeks of decline, share values climb. EU decision to help Greece and Wen Jiabao’s pledge to contain China’s inflation help trend.
Hong Kong (AsiaNews/Agencies) – The International Energy Agency (IEA) had decided to increase global oil supplies in an effort to control prices. This has boosted major stock indexes across Asia following several weeks of decline.
The IEA is adding 60 million barrels to global markets from its reserves over the next month, ahead of peak demand, saying it has to make up for the shortfall due to the war in Libya.
For analysts, the move will help the United States stabilise its economic recovery by lowering the price of oil.
Crude oil for August delivery tumbled 4.6 percent to US$ 91.02 a barrel in New York yesterday. In London, Brent Crude dropped by just over 5 per cent.
Asian shares were up. In Hong Kong, the Hang Seng Index rose 1.9 per cent. In China, the Shanghai Composite Index surged 2.2 per cent, whilst in South Korea, the Kospi Index gained 1.7 per cent. Since the start of May, the MSCI Asia Pacific Index had dropped 6.2 per cent.
Two factors boosted stock values. First, the European Union pledged to stabilise the economy of the Euro zone, vowing to stave off a Greek default as long as the country’s parliament voted in favour of 78 billion Euros (US$ 111 billion) of budget cuts next week. Secondly, Chinese Prime Minister Wen Jiabao reassured markets that his government would keep inflation under control.