While the European indices continued to benefit from the reports of an OPEC output deal, Brent Crude itself seemed a bit more sceptical.
The black stuff has spent the morning teasing a half a percent decline, suggesting that the joy the commodity felt last night doesn’t quite hold up in the cold light of day. That’s not only because OPEC is a notoriously fickle and unreliable institution – in other words, it’s not the first time that the market has heard promises of some kind of cap – but that the new daily output range is more like a freeze than an actual cut in production.
This admittedly hasn’t stopped the commodity sector as a whole celebrating the deal that was revealed following OPEC’s side-line meetings at the International Energy Forum in Algiers. With both BP and Shell up between 4.5% and 5.5% the FTSE has managed to maintain its 85 point, 6900-crossing increase despite Capita’s 23% collapse. The CAC rose 1.3%, while the DAX lagged slightly behind with growth of 0.7%, the German index’s gains contracting followed news that Commerzbank is cutting 9600 jobs as part of its restructuring plan.
Looking ahead to the US open and the Dow Jones doesn’t look prepared to join in with the OPEC optimism, with the futures pointing to a flat start to the session. That reticence might be due, however, to the fact that before the bell rings on Wall Street investors will get America’s final GDP reading for the second quarter, with analysts anticipating an upwards revision from 1.1% to 1.3% at the annualised rate.