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AFP

Business

Eurozone markets rise as oil prices fall on production increase reports

European Union Oil eurozone (Location) Russia Jamie Dimon Paris United States

JP Morgan boss Jamie Dimon has warned of an economic 'hurricane', telling investors to brace themselves. ©AFP

Paris (AFP) - Eurozone markets rose Thursday as oil prices fell on reports of an increase in output to make up for a Russian shortfall.

The Frankfurt DAX index was up by 0.6 percent at 14,423.36 points, while the Paris CAC 40 rose 0.8 percent at 6,469.92 points.London's FTSE 100 was shut for a holiday.

Equities fell in Asia as traders grow increasingly worried that central bank moves to rein in inflation could tip economies into recession.

Energy prices have soared since Russia invaded Ukraine on February 24, fuelling a sharp rise in inflation.

The OPEC+ group of major oil producers, led by Saudi Arabia and Russia, is expected to continue its policy of modestly raising production when it meets to discuss output later on Thursday, days after the EU agreed to ban most Russian crude.

But there was some relief for those concerned about inflation as oil sank more than two percent on a Financial Times report that Saudi Arabia was considering a plan to boost output as Russia struggles to meet targets owing to Ukraine war-linked sanctions.

The benchmark Brent crude was down 2.6 percent at $113.26 per barrel, with West Texas Intermediate also down 2.6 percent at $112.25.

Concerns about tighter Russian supplies have sent crude soaring this year, just as demand picks up owing to the reopening of economies but Riyadh has ignored previous calls to pump more.

The FT report follows a Wall Street Journal article saying OPEC was considering removing Russia from an agreement that has locked producers into limited output increases, which analysts said could lead to an early end of the pact and allow nations to open the taps more.

"Everything rests on the OPEC+ meeting today," said Jeffrey Halley, analyst at online trading platform OANDA.

"If Russia is sidelined, I mean exempted from its production quotas, with other members stepping up, European markets could find themselves with a decent tailwind today.A business-as-usual outcome is likely to see a disappointing reaction," he said.

'Brace yourself'

After a weak lead from Wall Street, Asia was mostly in negative territory.Hong Kong shed one percent, while Tokyo, Sydney, Seoul, Singapore, Wellington, Manila, Jakarta and Taipei were also well down.Shanghai and Mumbai edged up.

Concern over the outlook was shared by Wall Street titan Jamie Dimon, who warned that the wave of unprecedented crises were combining to cause an economic superstorm.

"That hurricane is right out there down the road coming our way," the JPMorgan Chase & Co boss said."We don't know if it's a minor one or Superstorm Sandy.You better brace yourself."

However, in sign of the huge uncertainty coursing through markets, a top strategist at the bank, Marko Kolanovic, painted a more positive picture, forecasting a market recovery through 2022.

"We remain positive on risky assets due to near record-low positioning, bearish sentiment, and our view that there will be no recession given support from US consumers, global post-Covid reopening, and China stimulus and recovery," he wrote in a note.