September 14, 2017 / 7:14 PM / in 10 months

GLOBAL MARKETS-U.S. oil above $50 a barrel, sterling jumps; stocks mixed

(Adds oil, gold settlement prices)

* Oil rises on expectations of stronger demand

* BoE rate hike warning lifts sterling, hits British index

* Dollar heads higher after above-forecast inflation data

* Graphic: World FX rates in 2017:

By Herbert Lash

NEW YORK, Sept 14 (Reuters) - Rising demand pushed U.S. crude above $50 a barrel on Thursday, while sterling jumped after the Bank of England said it was likely to raise interest rates for the first time in a decade in coming months.

Energy shares climbed on Wall Street and in Europe, but stocks were mixed worldwide. A gauge of global equity indexes fell slightly, as did the benchmark S&P 500 in the United States, while the Dow and major European indexes rose.

West Texas Intermediate, the U.S. crude benchmark, rose more than 2 percent before paring gains after a forecast by the International Energy Agency on Wednesday and dollar weakness that prompted bullish sentiment in the oil market.

“Anticipation is growing that this could quicken the pace of oil market rebalancing,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.

U.S. crude rose 59 cents to settle at $49.89 a barrel and Brent settled up 31 cents at $55.47.

Brent has climbed more than $10 a barrel over the past three months and is close to where it was at the beginning of the year, roughly trading between $55 and $57 a barrel.

BP Chief Executive Bob Dudley told Reuters in an interview that oil prices were likely to stay between $50 and $60 a barrel as major producers kept output restricted.

Meanwhile, the new guidance from the Bank of England pushed sterling to a one-year high against the U.S. dollar as investors priced in a more than 50 percent chance of a rate hike before the year’s end.

The central bank said its tolerance for above-target inflation has declined even if Britain’s departure from the European Union remained a risk. Data this week showed British prices rising faster and unemployment falling to a four-decade low.

Sterling was last trading at $1.3398, up 1.42 percent on the day. Earlier it rose to a 12-month high of $1.3404.

Britain’s blue-chip FTSE 100 share index fell sharply after the BoE warning, which followed a monetary policy meeting, and closed down 1.14 percent to lows last seen in May.

In other currency trading, the dollar index fell 0.43 percent, while the euro rose 0.24 percent to $1.1913.

The Japanese yen weakened 0.05 percent versus the greenback at 110.55 per dollar.


Energy stocks helped put the Dow in positive territory as Exxon Mobil Corp rose 0.26 percent to $79.98 while Chevron Corp gained 0.27 percent to $114.49.

Also giving the Dow a boost was Boeing Co, which rose 1.4 percent after Deutsche Bank raised its share price target.

In Europe, Italy’s ENI SpA rose 0.59 percent and France’s Total SA gained 0.49 percent, helping lift the EURO STOXX 50 index of leading EU shares.

MSCI’s gauge of stocks across the globe shed 0.05 percent while the pan-European FTSEurofirst 300 index closed up 0.13 percent.

The Dow Jones Industrial Average rose 43.12 points, or 0.19 percent, to 22,201.3. The S&P 500 lost 2.15 points, or 0.09 percent, to 2,496.22, and the Nasdaq Composite dropped 22.98 points, or 0.36 percent, to 6,437.21.

U.S. Treasury yields briefly extended their rise with the 10-year yield touching a three-week peak following data that showed a faster-than-forecast 0.4 percent increase in domestic consumer prices in August.

Prices of 10-year benchmark U.S. Treasury notes traded littled changed to 2.1988 percent.

U.S. gold futures for December delivery settled up 0.1 percent at $1,329.30 an ounce.

Reporting by Herbert Lash; Editing by Bernadette Baum and Leslie Adler

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