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Oil prices and stocks head higher after erratic week

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ALMETYEVSK, REPUBLIC OF TATARSTAN, RUSSIA  AUGUST 17, 2021: A pump jack operates in an oil field developed by Yelkhovneft, an oil and gas production board (NGDU) of Tatneft. Yegor Aleyev/TASS (Photo by Yegor Aleyev\TASS via Getty Images)
Oil headed higher after weeks of losses. Photo: Yegor Aleyev\TASS via Getty Images

Oil prices rebounded from recent lows on Monday in London, moving higher alongside major stock indices. 

Oil had suffered its worst losing streak since February 2018 in recent weeks, as fears about a slowing pace of economic recovery from the coronavirus set in. 

Confidence has returned, with Brent crude futures (BZ=F) up 4.8% to trade at $68.32 to the barrel by the closing bell in London. Crude futures (CL=F) were also 5% higher, hitting $65.27 to the barrel. 

Markets have been erratic in recent weeks, as investors weigh up the risks of inflation, the tapering of central bank stimulus and looming COVID Delta variant caseloads. 

"Investors should keep a close eye on tapering situation in order to predict how markets could move in the near future," said Naeem Aslam, chief market analyst at AvaTrade.

The FTSE 100 (^FTSE) was up 0.4% by the close. The DAX (^GDAX) was 0.3% higher following German flash PMI numbers.  

France's CAC (^FCHI) was also 1% higher. 

US stocks made gains by the end of the day in London, with the S&P 500 (^GSPC) up 1%. The Dow (^DJI) also rose 0.8% and the Nasdaq (^IXIC) was 1.3% higher. 

The direction of markets this week will also depend on the outcomes of the Jackson Hole symposium taking place on Thursday and Friday.

Read more: How to argue your case for permanent home working

Overnight in Asia, the Hang Seng (^HSI) headed up 1.1%, the SSE Composite (000001.SS) was 1.4% higher and the Nikkei (^N225) closed 1.8% higher. 

Asian markets have seen massive drops in recent weeks, following fears about regulatory crackdowns in China. The Hang Seng had recently fallen as much as 20% below its February peak.

China said it had made progress in containing the Delta variant of COVID, having brought local caseloads to zero. 

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