SYDNEY (Reuters) - Resource stocks were on a roll in Asia on Thursday as oil prices hit heights not seen since late 2014 and ignited a rally across commodities, though the potential boost to inflation globally also put some pressure on fixed-income assets.
Brent crude futures climbed another 29 cents to stand at $73.77 a barrel, adding to a 2.7 percent jump overnight. U.S. crude gained 26 cents to $68.73.
The surge came on a Reuters report that OPEC’s new price hawk Saudi Arabia would be happy for crude to rise to $80 or even $100, a sign Riyadh will seek no changes to a supply-cutting deal even though the agreement’s original target is within sight.
“The Saudis and their colleagues in OPEC need higher oil for their fiscal positions and the Kingdom is on a bold – and costly – reform program,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.
“So, they might continue to squeeze the lemon while they have the chance and the hand.”
The leap in oil combined with fears that sanctions on Russia could hit supplies of other commodities to light a fire under the entire sector. Aluminum prices reached their highest since 2011, alumina touched an all-time peak and nickel jumped the most in 6-1/2 years.
Such increases, if sustained, could fuel inflationary pressures and investors hedged by selling sovereign bonds.
Yields on U.S. two-year Treasuries stood at levels last visited in 2008 at 2.43 percent.
EXTRA ENERGY
Resource stocks were the big winners driving Australia’s main index up 0.6 percent. Japan’s Nikkei gained 0.6 percent,
