U.S. oil hits $50/barrel, sterling jumps; Dow at new high
Energy shares rose on Wall Street and in Europe, but stocks were mixed worldwide. A gauge of global equity indexes fell slightly, as did the S&P 500 in the United States, while major European indexes gained and the Dow set a new closing high.
West Texas Intermediate, the U.S. crude benchmark, rose more than 2 percent before paring gains after a forecast by the International Energy Agency on Wednesday and dollar weakness prompted bullish sentiment in the oil market.
"Anticipation is growing that this could quicken the pace of oil market rebalancing," said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London.
U.S. crude <CLcv1> rose 59 cents to settle at $49.89 a barrel and Brent <LCOcv1> settled up 31 cents at $55.47.
Brent has climbed more than $10 a barrel over the past three months and is close to where it was at the beginning of the year, roughly trading between $55 and $57 a barrel.
BP Chief Executive Bob Dudley told Reuters in an interview that oil prices were likely to stay between $50 and $60 a barrel as major producers kept output restricted.
Meanwhile, the new guidance from the Bank of England pushed sterling to a one-year high against the U.S. dollar as investors priced in a more than 50 percent chance of a rate hike before the year's end.
The central bank said its tolerance for above-target inflation has declined even if Britain's departure from the European Union remained a risk. Data this week showed British prices rising faster and unemployment falling to a four-decade low.
Sterling <GBP=> was last trading at $1.3402, up 1.45 percent on the day. Earlier it rose to a 12-month high of $1.3404.
Britain's blue-chip FTSE 100 share index <.FTSE> fell sharply after the BoE warning, which followed a monetary policy meeting, and closed down 1.14 percent to lows last seen in May.
In other currency trading, the dollar index <.DXY> fell 0.41 percent, while the euro <EUR=> was up 0.17 percent to $1.1905.
The Japanese yen strengthened 0.01 percent versus the greenback at 110.47 per dollar.
ENERGY SHARES RISE
Energy stocks helped put the Dow in positive territory as Exxon Mobil Corp <XOM> rose 0.4 percent to $80.09 while Chevron Corp <CVX> gained 0.24 percent to $114.45.
Also giving the Dow a boost was Boeing Co (>> Boeing Company (The)), which rose 1.36 percent after Deutsche Bank raised its share price target.
MSCI's gauge of stocks across the globe <.MIWD00000PUS> shed 0.05 percent while the pan-European FTSEurofirst 300 index <.FTEU3> closed up 0.13 percent.
The Dow Jones Industrial Average <.DJI> rose 45.3 points, or 0.2 percent, to 22,203.48. The S&P 500 <.SPX> fell 2.75 points, or 0.11 percent, to 2,495.62 and the Nasdaq Composite <.IXIC> dropped 31.10 points, or 0.48 percent, to 6,429.08.
U.S. Treasury yields briefly extended edged higher with the 10-year yield touching a three-week peak after data showed a faster-than-forecast 0.4 percent increase in domestic consumer prices in August.
Germany's 10-year bond yield hit a 3-1/2-week high as a rise in domestic consumer prices in the United States rekindled bets of a December interest rate hike in the United States, the world's biggest economy.
Prices of 10-year benchmark U.S. Treasury notes <US10YT=RR> traded little changed to 2.1935 percent.
German Bunds <DE10YT=RR> last rose 1 basis point in price to yield 0.412 percent.
U.S. gold futures <GCv1> for December delivery settled up 0.1 percent at $1,329.30 an ounce.
(Reporting by Herbert Lash; Editing by Bernadette Baum and Leslie Adler)
By Herbert Lash