Oil prices soar as global stock markets rise in value

Oil prices increased on Monday continuing recent price gains as global stock markets also rose in value, and despite dismal economic data coming from China and Japan.

The price of US benchmark West Texas Intermediate for March delivery increased 57 cents to hit USD 33.01 per barrel compared to Friday's closing level, AFP reported.

At the same time, the price of Brent North Sea crude for delivery in April rose 36 cents to stand at USD 33.72 a barrel in midday London trade.

"After surging higher at the end of last week, crude oil prices have started the new week on the front foot," said City Index analyst, Fawad Razaqzada.

He added, "Oil and other traders have completely shrugged off the weaker Chinese trade and Japanese GDP figures that were published overnight."

In parallel to oil price hike, European stock markets rallied sharply on Monday on the back of Asian gains after Shanghai avoided a sharp selloff on its return from holidays.

During Monday trading, Tokyo stocks soared more than seven percent, as reports about a fourth-quarter economic contraction boosted hopes for more stimulus measures.

"With Japan's Nikkei closing up more than seven percent higher and European stocks also coming back strong, the market either expects to see more Bank of Japan monetary stimuli and/or is more hopeful that oil prices have bottomed out," added Razaqzada.

The latest official report released by the Cabinet Office on Monday showed that Japan's economy has shrunk 0.4 percent in the last quarter of 2015, which translated into an annualized 1.4 percent. The news dealt another blow to Prime Minister Shinzo Abe's attempts to boost the country’s economic growth and ramp up inflation.

The report indicated that economic growth figure in the world's number three economy did not exceed a measly 0.4 percent for the whole of last year.

In the meantime, Shanghai stocks experienced modest losses that were capped by stimulus hopes in the wake of the disappointing trade numbers.

Shanghai ended 0.6 percent off, but the losses were limited considering traders were playing catch-up with last week's rout in world markets and after data showed that China’s exports have tumbled 11.2 percent year-on-year in dollar terms and its imports plunged 18.8 percent.

Earlier on Monday, crude oil prices initially fell as Iran announced its preparedness to ship its first consignment of crude oil since sanctions were lifted, fanning concerns over a global supply glut.

The fall, however, came after both Brent and WTI oil contracts had already risen over 10 percent on Friday after a report said the Organization of the Petroleum Exporting Countries (OPEC) was open to output cuts that could help global price pick up after hitting more than 12-year lows.

"After a massive rebound in oil prices of well over 10 percent, traders are looking to take some of those gains off the table," said Bernard Aw, a market strategist at IG in Singapore.

The analyst added, "The truth of the matter is that the supply glut still looms in the backdrop, especially with news of Iran loading its first cargo to Europe since sanctions ended. Put differently, any rebound, particularly the scale of Friday's rally, is still an opportunity to sell."

Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.co.uk