Volkswacht Bodensee - Oil prices advance on output cutbacks; equities rise

Brent crude, the international benchmark, and US counterpart WTI jumped after Riyadh extended a voluntary oil production cut of one million barrels per day, while Moscow -- whose invasion of Ukraine last year sparked oil market turmoil -- said it was slashing exports by 500,000 bpd.

Prices later pared gains as traders continued to digest the news from the two biggest members of the OPEC+ producers' alliance.

Asian and European stock markets meanwhile advanced, as easing inflation data fuelled hopes central banks could be nearing the end of their interest rate hiking cycle.

Investor sentiment was subdued on the eve of the Independence Day holiday in the United States.

- 'Knee-jerk reaction' -

"It's the usual knee-jerk reaction to reports of production cuts," IG analyst Chris Beauchamp told AFP, when asked about the latest oil-price gains.

"But given... it's not a coordinated move from all (OPEC+) members it seems hard to imagine there's much more upside in this."

He also warned that "the outlook for oil demand remains firmly under pressure" with many analysts forecasting recession next year.

Recent efforts by OPEC+ to bolster prices by reducing output have not succeeded.

In April, several OPEC+ members opted to slash production voluntarily by more than one million bpd -- a surprise move that briefly raised prices but failed to bring about lasting price recovery.

Brent is down 11 percent since the beginning of 2023 and WTI is down seven percent, as a sluggish recovery in China and worries about a possible economic downturn cloud the outlook.

"Recession concern in the Western world continue to weigh on the oil market sentiment," added UBS analyst Giovanni Staunovo.

"We continue to expect the oil market to tighten, and this should lift oil prices."

"But financial investors will likely stay cautious in the short term."

Stock markets had jumped Friday as data showed inflation cooling in both the United States and Europe, while Apple ended a session above $3 trillion in market value for the first time.

The personal consumption expenditures (PCE) index -- the US inflation measure closely watched by the Federal Reserve -- dropped in May to 3.8 percent year-on-year from 4.3 percent in April.

In Europe, figures showed eurozone consumer prices rose 5.5 percent in June, slowing from 6.1 percent in May thanks to a drop in energy costs.

The Federal Reserve and the European Central Bank have warned that more interest rate hikes are likely, but the latest data raised hopes they could soon wind down their monetary tightening.

Tokyo was also boosted after news that the Bank of Japan's closely watched Tankan survey of confidence among the country's largest manufacturers rose for the first time in seven quarters.

- Key figures around 1130 GMT -

Brent North Sea crude: UP 1.o percent at $76.14 per barrel

West Texas Intermediate: UP 1.1 percent at $71.42 per barrel

London - FTSE 100: UP 0.3 percent at 7,556.99 points

Paris - CAC 40: UP 0.2 percent at 7,412.45

Frankfurt - DAX: DOWN 0.1 percent at 16,132.67

EURO STOXX 50: UP 0.3 percent at 4,411.53

Tokyo - Nikkei 225: UP 1.7 percent at 33,753.33 (close)

Hong Kong - Hang Seng Index: UP 2.1 percent at 19,306.59 (close)

Shanghai - Composite: UP 1.3 percent at 3,243.97 (close)

New York - Dow: UP 0.8 percent at 34,407.60 (close)

Euro/dollar: DOWN at $1.0896 from $1.0909 on Friday

Pound/dollar: DOWN at $1.2670 from $1.2703

Dollar/yen: UP at 144.89 yen from 144.31 yen

Euro/pound: UP at 86.01 pence from 85.88 pence

burs-rfj/lth

N.Fournier--BTB