By Emma O’Brien and Nick Gentle
Nov. 27 (Bloomberg) — Oil slid to a four-year low amid concern OPEC won’t agree to cut output at today’s meeting while gold fell. Chinese shares traded at a three-year high on further monetary loosening and the yen strengthened a third day.
West Texas Intermediate crude tumbled 1.2 percent to $72.82 a barrel by 2:03 p.m. in Tokyo, falling for a fourth straight day. The Shanghai Composite Index rose 0.5 percent, touching the highest intraday level since August 2011. Samsung Electronics advanced as much as 8.3 percent in Seoul after saying it will buy back shares. Standard & Poor’s 500 Index futures were little changed after the U.S. gauge rose to a record. The yen gained 0.3 percent and gold slipped 0.8 percent.
Representatives from the 12 Organization of Petroleum Exporting Countries meet today in Vienna, with oil prices mired in a bear market. China’s central bank didn’t sell repurchase agreements in open-market operations for the first time since July, further loosening monetary policy after cutting interest rates for the first time since 2012. Reports on Spanish economic growth and German unemployment are due, while U.S. markets are closed for Thanksgiving.
“OPEC is the main event,” Michael McCarthy, chief strategist at CMC Markets in Sydney, said by phone. “The Saudis’ actions over the past month quite clearly indicate to the market that OPEC is unlikely to agree to production cuts, or if they do, the market will doubt the intent to deliver.”
Crude prices have collapsed this year, stoking deflation concerns, amid the highest U.S. oil output in three decades and signs of slowing demand globally. A Bloomberg News survey showed 20 analysts were evenly divided on whether OPEC will reduce supply to support prices.
Iran’s View
Brent crude sank 1.5 percent to $76.61 per barrel today in London, and earlier touched its lowest level since Sept. 7, 2010. WTI settled at $73.69 a barrel last session, its bottommost finish since Sept. 21, 2010, with volumes about 21 percent below their 100-day average. Prices have tumbled 26 percent this year.
OPEC, which pumps about 40 percent of the world’s oil, will discuss its official production target of 30 million barrels a day at the meeting in Austria. Iran’s oil minister said his nation’s view on oil markets is close to that of Saudi Arabia, whose representative said yesterday that prices will stabilize themselves without the need for production cuts.
The Shanghai Composite Index closed at the highest since Aug. 26, 2011 yesterday. The People’s Bank of China last suspended repos in its auction windows on July 22 and July 24, when initial public offerings were estimated to have frozen as much as 766.5 billion yuan ($125 billion). Shenyin Wanguo Securities Co. forecast such share sales would tie up 1.6 trillion yuan this week.
Peak Indicator?
The 30-day average value of shares changing hands on the Shanghai exchange exceeded 200 billion yuan ($32.6 billion) for the first time in four years on Nov. 25, after rising threefold in the past six months, according to data compiled by Bloomberg. Similar jumps coincided with market peaks in 2009 and 2010.
Hong Kong’s Hang Seng Index retreated 0.5 percent, while a gauge of Chinese shares listed in the city declined 0.2 percent, erasing an early gain of as much as 1.6 percent.
Samsung Electronics, the world’s biggest mobile-phone maker, surged to 1.295 million won a share. The firm announced after markets closed yesterday that it will buy back shares valued at 2.19 trillion won ($2 billion) after its parent group announced the sale of stakes in chemicals and defense businesses. The Kospi was headed for its highest close in almost two months.
Group Movers
The MSCI Asia Pacific Index was little changed, with about two shares dropping for each that advanced. Samsung drove a subindex of technology companies to the biggest increase among 10 industries on the regional gauge, while a measure of energy stocks retreated a third day.
Japan’s currency climbed to 117.36 per dollar after strengthening as much as 0.5 percent yesterday, while the Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was little changed following two days of losses.
The won gained for a fifth consecutive trading day, rising to 1,101.1 per dollar, the longest streak since July 3. South Korea’s current-account surplus increased to $9 billion for October, compared with a revised $7.4 billion in September, the central bank reported today. The full-year surplus will be a record $84 billion, the monetary authority estimated Oct. 15.
Gold for immediate delivery slid to $1,188.69 after assets in the largest exchange-traded product shrank to a six-year low. Silver retreated 1.6 percent to $16.2610.
