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Oil price slumps amid ample supply; equities climb

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By Herbert Lash NEW YORK (Reuters) – Crude oil extended a slump amid record U.S. stockpiles on Thursday, while bets the Federal Reserve will raise interest rates next week lifted equities on Wall Street and steadied a key gauge of global equity markets after five days of declines. U.S. equity indexes traded higher, as did major European indices, but a slide in oil major Royal Dutch Shell and miners hurt by tumbling copper prices had earlier in the day put a damper on a key index of global stocks. Oil prices extended their biggest decline this year as record U.S. crude inventories kept sentiment weak, pointing to a global glut despite supply cuts by the Organization of the Petroleum Exporting Companies. [EIA/S] Brent crude oil, the global benchmark, was down $1.07 a barrel at $52.04, while U.S. light crude $1.14 to $49.14 a barrel. [O/R] On Wall Street, the S&P financial index rose 0.47 percent ahead of a U.S. labor market report on Friday that is expected to bolster expectations the Fed will raise rates at a policy-setting meeting on March 15. “If not next week for the Fed, then when?” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston. “Geopolitical concerns are pretty complacent, the stock market’s high, the labor market is tight and inflation is near their target.” The Dow Jones Industrial Average rose 18.83 points, or 0.09 percent, to 20,874.56. The S&P 500 gained 3.78 points, or 0.16 percent, to 2,366.76 and the Nasdaq Composite added 9.78 points, or 0.17 percent, to 5,847.33. The FTSEurofirst 300 index of leading regional shares rose 0.12 percent to 1,470.93. The dollar fell against a basket of major currencies as the euro gained after European Central Bank chief Mario Draghi suggested it was less necessary to prop up the market through ultra-loose monetary policy. Draghi said the ECB removed a reference to using all available measures to induce growth and inflation “because the sense of urgency is not there.” The euro rose above the $1.06 level during Draghi’s remarks, reversing earlier selling that had brought it to a six-day low. It was last up 0.37 percent at $1.0578. The dollar index, which tracks the greenback against the euro and five other major world currencies, hit a session low of 101.700 as Draghi spoke. It was last down 0.14 percent at 101.930. Gold sank to a five-week low, with analysts expecting further losses, as investors become increasingly confident that U.S. interest rates will rise. U.S. gold futures eased by 0.45 percent to $1,203.90. With global energy stocks on the run, MSCI’s 46-country all world stock index fell for a sixth consecutive day, the longest slide since the start of 2016 and down from an all-time high set just over a week ago. (Reporting by Herbert Lash; Editing by Bernadette Baum)

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