A fourth consecutive day of gains in oil prices helped lift European shares on Thursday, while an almost 1 per cent fall against the euro this week took the shine off a strong 2015 for the dollar.
Falling supplies and the lifting of a 40-year old ban on most US crude exports pushed front-month West Texas Intermediate (WTI) crude futures 32 cents higher at $37.82 per barrel. They were set for the biggest weekly gain since early October.
Internationally traded Brent futures rose 30 cents to $37.66, having fallen about 35 per cent this year.
Cheapening oil prices have battered energy companies and lowered inflation expectations, pushing the government borrowing costs lower and reinvigorating bets on further European Central Bank monetary policy easing.
Britain’s blue-chip FTSE 100 index rose 0.3 per cent, while Spain’s IBEX advanced 0.7 per cent and France’s CAC edged down 0.1 per cent.
Germany’s DAX stock market was closed, with other markets due to close early for the Christmas holiday. Oil majors such as BP and Royal Dutch Shell climbed by around 1 per cent.
“The London market is benefiting from the latest rebound in crude oil prices,’’ said Spreadex analyst Connor Campbell.
European bond markets were closed. The euro was up 0.3 per cent at $1.0943, while the dollar was down 0.3 per cent against an index of rival currencies, having risen almost 9 per cent this year.
Against the euro, the dollar lost 0.8 per cent this week, having gained 11 per cent since January in the run-up to the first US Federal Reserve interest rate hike since 2006.
“As we move closer towards 2016 there are few calls for the dollar to repeat its 2015 strength, even despite the Fed now finally having commenced its tightening cycle,’’ said Simon Smith, chief economist at FXPro.
The gains in European shares mirrored the upbeat mood in Asia and on Wall Street. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.6 per cent, after US stocks posted their third straight session of gains.
But China’s blue-chip CSI300 index and the Shanghai Composite Index were down 0.7-1.0 per cent after regulators tightened rules for insurers investing in listed firms.
Japan’s Nikkei ended 0.5 per cent lower after a stronger start.
Japanese Prime Minister Shinzo Abe’s cabinet approved on Thursday a record fiscal 2016 budget that counts on higher growth and tax revenue to achieve Abe’s aim of reviving the economy and reining in public debt.
Minutes of the Bank of Japan’s November rate review released earlier in the session showed that many policymakers complained of slow wage and capital expenditure growth, but were optimistic that companies will start to boost spending once emerging economies improve.
Spot gold rose 0.3 per cent to $1,073.60 an ounce.