By Peter Nurse
Investing.com – European stock markets slipped lower Tuesday as investors digested a rise in oil prices, while the U.K. food retail sector remained in the spotlight as Ocado (LON:OCDO) soared and J Sainsbury (LON:SBRY) stock eked out another three-year high.
The Organization of the Petroleum Exporting Countries and allies, a grouping known as OPEC+, abandoned oil output talks on Monday, after failing to agree a deal to boost production.
Any production deals within the group have to be agreed unanimously, and the United Arab Emirates rejected a proposal that would have increased output by about 2 million barrels a day between August and December 2021, as well as keeping the remaining limits on output to the end of 2022.
The lack of agreement helped push oil prices to their highest levels in nearly three years, adding to near-term inflationary pressures that threaten to undermine the global economic recovery.
At 3:35 AM ET, U.S. crude futures traded 2.3% higher at $76.87 a barrel, reaching its highest level since October 2018, while the Brent contract rose 0.7% to $77.71, climbing about $77 a barrel for the first time since 2018 this week.
On the flip side, these oil price gains helped the oil majors strengthen Tuesday, with BP (NYSE:BP) stock up 1%, Royal Dutch Shell (LON:RDSa) stock 1.9% higher, Eni (MI:ENI) stock up 0.8% and Total stock 0.9% higher.
Elsewhere, German factory orders slumped 3.7% in May, significantly below the 1.0% rise expected, driven by weak export demand for cars, a sign that the global chip shortage is taking an ever more serious toll on industry more broadly.
On a more positive note, U.K. Prime Minister Boris Johnson outlined plans on Monday to end all restrictions put in place to combat the Covid-19 virus in two weeks, and Germany announced plans to lift travel restrictions on fully vaccinated travelers from the U.K., and Portugal, from Wednesday.
In corporate news, J Sainsbury (OTC:JSAIY) stock rose 0.1% as investors weighed up the British supermarket chain beating expectations for first-quarter sales with a sharp slowdown from last year when shoppers prepared for the first Covid-19 lockdown.
Ocado stock rose 3.8% after the British online grocer announced a 20% rise in revenue for its first half, as well as a deal to develop Alcampo’s online business in Spain. The stock has still lost more than one-third of its value from last year’s peak, when euphoria about the acceleration of online shopping made it a standout performer. Meanwhile in Germany, another winner from the shift to online shopping – Shop Apotheke Europe (DE:SAEG) stock – fell 8% after the pharmacy warned of slowing sales growth.
European Stocks Edge Lower; Ocado Soars on Spanish Deal
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