Brent at 11-month highs, yields forgo daily gains

    NEW YORK (Reuters) – Oil prices hit their highs in nearly a year on Tuesday due to betting on the lowest supply and Treasury yields fell after strong demand at an auction.

    Shares, meanwhile, rose, led by Asia, with eyes on US earnings and the inauguration of US President-elect Joe Biden next week.

    The 10-year U.S. yield hit its highest since March, but fell almost to pot level the day after a $ 38 billion bid from the Treasury was well offered. The yield has increased with each session this year based on expectations of a massive stimulus package from the upcoming democratic administration.

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    Brent crude oil prices hit their highest levels since February as tighter supply and expectations of a decline in U.S. inventories offset concerns over rising coronavirus cases globally. Saudi Arabia said it plans to cut production by an additional 1 million barrels per day in February and March.

    “Saudi Arabia, in particular, is ensuring, through its further voluntary production cuts, that the market is insufficiently supplied,” said Commerzbank’s Eugen Weinberg.

    Brent crude stood at $ 56.55, up 1.6% on the day, while US crude oil recently climbed 1.74% to $ 53.16 a barrel.

    On Wall Street, stocks fluctuated almost unchanged for the session not far off from record. The Dow was up 69.3 points, or 0.22%, to 31,077.99, the S&P 500 gained 1.13 points, or 0.03%, to 3,800.74, and the Nasdaq Composite added 24, 72 points, or 0.19%, at 13,061.15.

    The pan-European STOXX 600 index rose 0.05% and the MSCI index of stocks around the world gained 0.31%.

    Emerging market equities were up 0.54%, while Nikkei futures were up 0.50%. Mainland China stocks gained 2.2% overnight to close at the highest in over five years.

    Democrats said Tuesday they will give President Donald Trump one last chance to leave office days before his term expires or face an unprecedented second impeachment for his supporters’ deadly assault on the U.S. Capitol on Jan.6. .

    An impeachment trial could proceed even after Trump leaves office. Some Democrats have expressed concern that a trial could thwart Biden’s agenda, slowing the confirmation of his appointees and distracting from legislative priorities such as a new coronavirus aid package.

    “Even if (additional stimulus) is delayed, it will be a matter of days, maybe weeks, not months. The question is the shape and form of it, ”said Keith Buchanan, GlobAlt’s portfolio manager in Atlanta.

    The US government’s ten-year debt benchmark rose 1/32 of the price to 1.1325%, from 1.134% late on Monday. The yield reached 1.187% at the start of the session.

    The US dollar fell after hitting a high since December on Monday, and lower Treasury yields pushed the greenback further.

    The dollar index was down 0.452%, with the euro up 0.44% to $ 1.2203.

    The Japanese yen strengthened 0.48% against the greenback to 103.76 per dollar, while the pound was last traded at $ 1.3661, up 1.09% on the day .

    Spot gold added 0.5% to $ 1,854.17 an ounce. Silver gained 2.52% to $ 25.55.

    Bitcoin fell 3.86% to $ 34,087.00.

    Reporting by Rodrigo Campos; additional reports by Devik Jain and Medha Singh in Bengaluru, Saqib Iqbal Ahmed, Laura Sanicola, Karen Brettell and Herbert Lash in New York and Alex Lawler in London; Editing by Dan Grebler

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