Oil prices headed higher on Monday morning on hopes that OPEC will continue its production cuts past its original May deadline. Brent crude futures were up 30 cents per barrel to $52.26 per barrel, a 0.6 percent increase. U.S. WTI crude oil futures gained 26 cents to $49.88 per barrel, but remained notably below the important $50 mark. U.S. drillers added oil rigs for the 14th consecutive week last week, and the increase is expected to continue into May, a fear that sent prices sharply lower last week. Both Brent and WTI prices are down nearly 7.5 percent since the start of the year.
China Stocks Plunge
Despite oil’s improving picture, the markets didn’t start the week positively everywhere. Chinese stocks fell more than 1 percent on Monday as the country’s regulators flexed their muscles on shadow banking and speculative trading. The Shanghai Composite Index was down 1.6 percent before midday and the country’s indices are now looking to close the biggest day of losses since December 2016.
Currencies React to French Election
Election results out of France on Sunday sent shockwaves through the global markets on Monday as traders reacted to the news that the country’s upcoming May election will pit Centrist Emmanuel Macron against far-right leader Marine Le Pen. Macron, a staunchly pro-EU candidate is expected to emerge victorious and to keep France in the union.
The euro gained 1.1 percent against the dollar on Monday morning to trade at $1.0844. The common currency also jumped against the yen, up 2.1 percent to trade at 119.34 yen. The euro’s gains sent the dollar index broadly lower, with a 0.8 percent drop to 99.179.
Traders are now eyeing Thursday’s European Central Bank meeting which is expected to keep the body’s monetary easing policy unchanged.