Falling oil prices sap energy majors; Wall St dips after mixed jobs report

Energy majors on both sides of the Atlantic followed Brent crude oil prices lower as investors amid concerns about global oversupply, with the likes of Chevron, Exxon Mobil, BP and Shell all on the red side of the ledger, while carriers including easyJet, United Airlines and Lufthansa rallied on the prospect of cheaper jet fuel.

Stocks on Wall Street were weaker after delayed jobs data showed the US economy added slightly more jobs than expected, even as the unemployment rate ticked up faster than predicted, keeping bond traders on the sidelines in their predictions of how quickly the Federal Reserve will cut interest rates next year.

Meanwhile, the White House is threatening retaliation against the European Union’s efforts to tax US retch companies, singling out firms such as Accenture, Siemens and Spotify Technology as potentially facing fees or restrictions if the continental bloc pushes ahead with regulations to rein in the likes of Alphabet’s Google, Meta Platforms and Amazon.

And dairy prices fell for a ninth time at the latest Global Dairy Trade auction, with whole milk prices down 5.7%, coming ahead of Statistics New Zealand’s balance of payments figures which are expected to show a narrowing of the current account deficit to 3.4% of gross domestic product.

Falling oil

Brent crude oil prices fell to their lowest level in more than four-and-a-half years as growing hopes for an end to the Russia-Ukraine war, expanding production from the Organization of the Petroleum Exporting Countries and soft demand from Chinese industries combine keep the fuel under pressure. Brent crude oil futures were down 2.5% at US$59.04 a barrel.

Energy majors including Chevron, Exxon Mobile, BP and Shell were all on the red side of the ledger in a broadly softer day for Wall Street, and Australian futures are pointing to a 0.1% decline for the resources-heavy S&P/ASX 200 index when trading opens across the Tasman today.

Meanwhile, carriers rallied with Europe’s Lufthansa and easyJet advancing, while US airlines United Airlines, Southwest Airlines and American Airlines were further buoyed by upbeat analyst recommendations on their new pricing strategies and prospects for renewed corporate travel.

National carrier Air New Zealand is down 3.3% so far this year in what would be its eighth annual decline, while Auckland International Airport has declined 6% so far in 2025. Online travel software developer Serko has sunk 21% so far this year.

Stocks on Wall Street were weaker after jobs data showed the US added 64,000 jobs in November, more than expected, although the unemployment rate rose to a four-year high 4.6%.

“The general view was that while the labour market was still on a softer trajectory, the data were not weak enough to change expectations of the outlook for monetary policy,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “There will be another employment report ahead of the Fed’s January meeting.”

Red lights

The S&P 500 and Dow Jones Industrial Average indices were both down 0.8% in late trading, while the tech-heavy Nasdaq Composite fell a more muted 0.5%.

Meanwhile, the White House is ratcheting up its tensions with the European Union over the continent’s plans to restrict big tech firms such as Google and Meta, threatening to impose fees on the likes of Spotify, Accenture, Siemens and Capgemini among others if the bloc continues with regulations to restrain and tax the US firms.

Stock markets across the Atlantic were weaker as investors unpicked the US jobs data and soft manufacturing gauges in Germany and France. The UK’s FTSE 100 declined 0.7%, Germany’s DAX 30 was down 0.6% and France’s CAC 40 sipped 0.2%.

Locally, the dairy companies including Fonterra’s Shareholders’ Fund and Synlait Milk will be in view after the GDT price index fell 4.4% at the latest Global Dairy Trade auction, with an average price of US$3,341 a tonne. Whole milk powder prices fell 5.7% to US 3,161 a tonne.

Stats NZ releases its September quarter balance of payments figures today, which are expected to show the current account narrowing to 3.4% of GDP, while Westpac’s quarterly consumer confidence survey is also due.

Among NZX-listed companies holding annual meetings today, are Napier Port, Comvita and Sanford.

Reporting by Paul McBeth. Image from Zbynek Burival on Unsplash.