While you were sleeping: G-20, OPEC production

Monday 16th March 2009

G-20 finance and central bank chiefs pledged to bolster the International Monetary Fund's resources to battle the worst economic slump since the 1930s.

Delegates at the meeting in Horsham, England also said they'll increase regulation of hedge funds and keep a tighter rein on credit rating companies among steps to avoid a report of the current economic and financial crisis. They pledged to help banks clean up toxic assets.

US Treasury Secretary Timothy Geithner said he will announce soon his plans to assist banks remove the bad assets from their balance sheets.

"We have and expect to see a lot of support for this program" among potential buyers of the assets, he told Bloomberg.

The IMF funding may be doubled to US$500 billion, Reuters reported, citing an unidentified official at the meeting. British Prime Minister Gordon Brown said "massive change" was pending in financial market regulation.

In Vienna, the Organization of Petroleum Exporting Countries agreed to keep quotas for oil production unchanged and ensure members of the cartel adhere to cuts agreed already agreed last year. OPEC set a deadline of May 28 to meet the cutbacks, which amount to about a further 800,000 barrels a day.

"We would like to see compliance as high as possible," Saudi Arabia's Oil Minister Ali al-Naimi said at a media conference before the meeting.

OPEC agreed to cut production by 4.2 million barrels a day. Crude oil for April delivery rose as much as 2.4% to US$48.14 a barrel on the New York Mercantile Exchange on Friday and settled at US$46.25.

Shares on Wall Street rose on Friday, rounding out the best week in four months, helped by a rebound in financials after the three largest lenders, Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., said they were profitable in the first two months of the year.

Citigroup rose 6.6% to US$1.78 on Friday, bringing its gain last week to about 50%. JPMorgan Chase gained 2.4% to US$23.75 while Bank of America fell 1.5% to US$5.76.

The Dow Jones Industrial Average climbed 53.92, or 0.8%, to 7223.98. The Standard & Poor's 500 Index rose 0.8% to 756.55 on Friday. The Nasdaq Composite gained 0.4% to 1431.5.

Home Depot rose 1.9% to US$20.71 after figures showed US retail sales dropped less than expected last month, stoking optimism the world's biggest economy may have troughed.

Sales fell 0.1% in February after gaining 1.8% the previous month, according to the Commerce Department. Ex-auto sales rose 0.7%.

Still, Lawrence Summers, director of President Barack Obama's National Economic Council, said it is too early to predict the end of the recession in the US, where job losses are likely to continue.

Summers told ABC's "This Week" program that "no one can make that judgment" when the economic slump will end.

The US dollar weakened against the euro as the rebound in stocks damped demand for the greenback as a haven and encouraged investors to seek riskier, or higher-yielding assets.

The euro reached $1.2927 on Friday in New York. It rose 0.4% to 126.78 yen. The dollar rose about 0.2% to 97.95 yen.

Copper rose amid signs the global stockpiles of the metal as easing. Stockpiles measured by the Shanghai Futures Exchange fell almost 10% last week to 34,735 tons.

Copper futures for May delivery rose 2.5% to US$1.6645 a pound on the New York Mercantile Exchange.

Gold for April delivery rose 0.7% to US$930.10 an ounce in New York.

In Europe, the Dow Jones Stoxx 600 Index rose 0.7% to 168.57. Austrian real estate investment company Atrium European jumped 26%. Alcatel-Lucent rose 15% and private banking firm EFG International gained 14%.

The FTSE 100 Index gained 1.1% to 3753.68 and the CAC 40 gained 0.4% to 2705.63. Germany's DAX 30 fell 0.1% to 3953.68.

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