Oil hits one-year peak on US storm

·3-min read
A winter storm pushed oil prices higher as the market anticipated a draw on stocks for heating

A snowstorm pushed oil prices to pre-pandemic levels Tuesday as global stocks extended rallies on hopes for more US fiscal stimulus.

Silver prices sank by 7.8 percent to $26.78 per ounce meanwhile, having spiked the previous day to an eight-year peak on chatroom-driven demand.

Stock indices fired up as investors got back in the saddle after last week's global rout and snapped up bargain shares.

"The new month continues to be good to equities, which have thrown off their late January despair and staged an impressive bounce from the lows of last week," remarked IG analyst Chris Beauchamp.

In midday New York trading, the Dow Jones index showed a gain of 2.0 percent.

- Oil powers higher -

Oil prices surged on the back of upbeat market sentiment and a snowstorm that socked the northeastern United States.

US benchmark West Texas Intermediate oil soared to one-year high around $54.91 per barrel, while Brent North Sea crude hit $57.70, a level last reached nearly a year ago.

"Oil prices powered higher... lifted in part by the positive sentiment returning to equity markets, but mostly because of frigid weather sweeping the United States, pushing up the demand for heating," said OANDA analyst Jeffrey Halley.

The rebound marked a stunning turnaround for the oil market, which briefly turned negative last year as the deadly Covid-19 outbreak shuttered economies and companies worldwide.

"The important thing is that it ends the period of consolidation" in crude prices seen since mid-January, added Craig Erlam, a senior market analyst at OANDA.

BP shares nonetheless tanked by 4.5 percent after the energy group said it plunged into a net loss of $20.3 billion last year due to the pandemic.

On the US stimulus front, President Joe Biden met Monday with Republican lawmakers to discuss their stimulus counter-proposal as he looks for a bipartisan deal.

The $600 billion plan backed by Republicans is worth less than a third of one put forward by the White House, and includes smaller handouts and no provision for state and local governments -- two issues that Democrats are likely to reject.

Elsewhere, fears about the social media-led retail investor battle with Wall Street hedge funds that undermined sentiment last week appeared to be abating.

- Key figures around 1630 GMT -

New York - Dow: UP 2.0 percent at 30,812.77 points

EURO STOXX 50: UP 1.8 percent at 3,594.99

London - FTSE 100: UP 0.8 percent at 6,516.65 (close)

Frankfurt - DAX 30: UP 1.6 percent at 13,835.16 (close)

Paris - CAC 40: UP 1.9 percent at 5,563.11 (close)

Tokyo - Nikkei 225: UP 1.0 percent at 28,362.17 (close)

Hong Kong - Hang Seng: UP 1.2 percent at 29,248.70 (close)

Shanghai - Composite: UP 0.8 percent at 3,533.68 (close)

Euro/dollar: DOWN at $1.2028 from $1.2060 at 2200 GMT

Dollar/yen: UP at 105.12 yen from 104.93 yen

Pound/dollar: DOWN at $1.3629 from $1.3663

Euro/pound: UNCHANGED at 88.26 pence

West Texas Intermediate: UP 2.5 percent at $54.91 per barrel

Brent North Sea crude: UP 2.4 percent at $57.70 per barrel