Oil dips on OPEC output-cut concerns, stocks shaky

Mon Oct 31, 2016 4:48pm EDT
 
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By Saqib Iqbal Ahmed

NEW YORK (Reuters) - Oil prices fell sharply on Monday to touch a one-month low on doubts about OPEC's ability to implement its planned production cut, while global equity prices were shaky as Wall Street struggled to build on a sentiment boost from a string of M&A deals.

Month-end rebalancing and uncertainty over next week's U.S. presidential election helped demand for bonds even as they posted a weak monthly performance.

Oil prices dropped more than 3 percent on skepticism about OPEC's planned production cut, with the market further weighed by expectations that the cartel had record output in October.

"The market is becoming a bit weary," said Kyle Cooper, analyst at ION Energy in Houston. "Unless OPEC can circle the wagons and get everyone on the same page, the market's going to be skeptical."

Brent crude settled down $1.41, or 2.84 percent, at $48.30 a barrel, while U.S. crude settled down $1.84, or 3.78 percent, at $46.86.

Lower oil prices weighed on energy shares on Wall Street and in Europe. MSCI's 47-country "All World" index gave up gains from earlier in the session and was little changed.

A flurry of deal activity that included General Electric's merger of its oil and gas business with Baker Hughes Inc and CenturyLink's acquisition of Level 3 Communications failed to boost Wall Street shares.

Investors remained cautious about taking large positions ahead of the outcome of the U.S. election.   Continued...

 
Traders work at their desks in front of the German share price index, DAX board, at the stock exchange in Frankfurt, Germany, October 21, 2016. REUTERS/Staff/Remote