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(Bloomberg) -- Oil surged the most in over a week in London as broader markets rallied on expectations of additional U.S. stimulus boosting the economy.Futures in London rose 2.1% on Tuesday. U.S. stocks gained as Treasury Secretary nominee Janet Yellen called on lawmakers to “act big” on stimulus, which could provide a boost to consumption while vaccines continue to be rolled out. A weaker U.S. dollar is also increasing the appeal for commodities that are priced in the currency.“Yellen has implied there’s going to be stimulus for size and that implies we’re going to have demand creation,” said Bob Yawger, head of the futures division at Mizuho Securities. The expectation of a weaker dollar over the next few weeks “will start to supersize the reflation trade and crude oil is front and center as far as that’s concerned.”Meanwhile, the oil futures curve is signaling growing expectations of supply tightness. Brent’s nearest contract is trading at a premium to the following month after settling at a discount on Friday. The flip to the bullish pattern known as backwardation strengthened sharply shortly before a key North Sea pricing window showed renewed buying interest from Unipec, the trading arm of China’s largest oil refiner.West Texas Intermediate crude’s so-called prompt spread is also on the verge of flipping to backwardation for the first time since May, settling at parity on Tuesday.But the near-term trajectory of oil’s demand recovery has lost some momentum as governments tighten restrictions to curb the spread of Covid-19. In China, there are government calls for citizens not to travel over the Lunar New Year holidays, while vast swaths of Japan are in a state of emergency and several European nations are still locked down.OPEC Secretary-General Mohammad Barkindo said that while the producer group is cautiously optimistic about a recovery this year, the rebound is fragile. Meanwhile, the International Energy Agency cut its demand outlook for the rest of the year as the virus continues to impede mobility.“Demand is a work in progress,” said Stewart Glickman, energy equity analyst at CFRA Research. “It’s starting to come back, but we’re not seeing a huge surge in demand that would give a little more confidence about how the economy’s doing.”Still, despite the reduction in the IEA’s demand estimates, global oil stockpiles stand to fall by 100 million barrels in the first quarter and the agency sees much steeper declines in the second half of the year. That comes as traders have been rushing back to the market on expectations of a recovery in global growth later in 2021.“A swift recovery in global mobility could create a substantial oil deficit in 2021 as herd immunity takes hold across a major economies,” Bank of America Global Research said in a report. Still, “with a clear risk of new lockdowns ahead due to the new virus strains and refinery crude demand set to ebb off seasonally, we see limited upside to crude oil prices in the very near-term.”There have also been small pockets of supply outages in recent days. Kazakh oil production fell by about 300,000 barrels a day on Monday due to planned maintenance, while Libyan output slipped over the weekend on pipeline repairs.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Bank of America Corp.’s traders had a good year -- but not as good as their rivals.Revenue from sales and trading rose 7% to $3.06 billion in the fourth quarter, missing analysts’ $3.15 billion forecast. The division, helmed by Jim DeMare, was boosted by equities but saw a weaker trading performance in fixed income, currencies and commodities, driven by macro products and mortgages, the bank said in a statement. Competitors JPMorgan Chase & Co. and Goldman Sachs Group Inc., meanwhile, reaped windfalls from frenetic trading and volatile markets during the pandemic.“With the change in interest-rate environment, I think you could see a lot of activity in FICC, so I don’t think there’s a reason to think it’s going to decline dramatically from here,” Chief Financial Officer Paul Donofrio said Tuesday on a call with reporters. “As long as the equity markets stay robust, you could see significant activity in 2021” for equity issuance, while the pace of bond issuance will probably slow this year with many companies having boosted liquidity and paid down debt.Investment bankers and traders have carried the load for their firms in the past year as consumer divisions came under pressure from the Covid-19 outbreak that shut down businesses and put millions out of work. After setting aside tens of billions of dollars to cover potential loan losses during the crisis, the largest lenders have fared surprisingly well. They even got approval last month from the Federal Reserve to buy back shares.Bank of America said its board authorized the repurchase of $2.9 billion of shares through March, the most allowed under Fed guidelines.Bank of America shares were little changed at $32.99 at 11:15 a.m. in New York.Investment-banking fees jumped 26% to $1.86 billion, beating the $1.62 billion estimate. The division, led by Matthew Koder, benefited from equity underwriting and mergers-and-acquisitions fees during the quarter. It posted record fees for the full year, fueled by three of the strongest quarters in company history.“We saw a significant gain in our investment-banking market share,” particularly among middle-market clients, Chief Executive Officer Brian Moynihan told analysts on a conference call. “This has been a multiyear effort” of hiring and connecting investment and commercial bankers across the country.The Charlotte, North Carolina-based company’s net interest income, or revenue from customer loan payments minus what the company pays depositors, decreased 16% to $10.3 billion. NII in the second half of this year will probably improve compared with the first half, according to the company.“We’ve got to work it back up from here,” Moynihan said. “It’s a four- or five-quarter fight.”Consumer banking continued to weigh on results. Net income for the unit fell 17% to $2.6 billion, under pressure from lower interest rates and higher health and safety costs. But executives reiterated their optimistic stance.“We continued to see signs of a recovery, led by increased consumer spending, stabilizing loan demand by our commercial customers, and strong markets and investing activity,” Moynihan said in the statement. “The latest stimulus package, continued progress on vaccines and our talented teammates -- who performed well helping their customers through this crisis -- position us well as the recovery continues.”Also in the fourth-quarter results:The efficiency ratio, a measure of profitability, improved to 69% from 71% in the third quarter.Net income fell to $5.47 billion from $7 billion a year earlier. It exceeded the $4.9 billion estimate of 12 analysts. Per-share earnings of 59 cents beat analysts’ 55-cent forecast. For the full year, net income fell 35% to $17.9 billion.Total revenue decreased about 10% to $20.1 billion.(Updates with chart after third paragraph and full-year net income in penultimate bullet point. An earlier version of this story corrected the percentage increase in seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.