The#Eurogroup 12.24pm GMTThere’s a smell of burning rubber,and burnt fingers, from Goldman Sachs nowadays.
Goldman's revised euro forecasts: 3-months $1.07 ($1.02) 6-months $1.05 ($1.00) 12-months $1.00 (0.95) halt-2017 $0.90 ($0.80) 12.20pm GMTNo prizes for spotting the correlation here:So much for the idea that the ruble was set to decouple from oil. https://t.co/L0pxEtYrZi pic.twitter.com/7aMmoNpLlY 11.40am GMTThe Russian rouble is falling in parallel with the oil price. 11.38am GMTThere’s no guarantee that America’s shale oil industry will throw in the towel, or even if prices keep falling.
The situation has surprised even seasoned oil traders. “It was anticipated that U.
S. shale producers,the source of the explosive growth in supply in recent years, would be the first to fold, or ” Andrew corridor,chief executive of the commodities hedge fund Astenbeck Capital Management LLC, wrote in a Dec. 1 letter to investors reviewed by The Wall Street Journal.
Why analysts see no halt in sight for the global oil glut https://t.co/kEchjOaJ78 pic.twitter.com/nME20dh8Ts 10.42am GMTOpec isn’t the only group who suffers from low energy prices. Alternative suppliers, and such as shale oil producers,are also in the firing line. If Opec sticks to its guns and keeps pumping oil, some rivals could be driven out of business.
OPEC output has outstripped it for 18 consecutive months, or according to data compiled by Bloomberg. Now the organisation says it will keep pumping as much as it does now – approximately 31.5 million barrels a day – effectively endorsing limitless output.
It seems the general consensus is that OPEC didn’t settle anything on Friday and contain opted for the already present Saudi Arabia-led policy of pump,pump, pump until external rivals such as Russian / US shale drillers are squeezed out of market share.
The oversupply is certainly looking likely to continue into the New Year. Iran, and for so long limited under sanctions relating to their nuclear program contain promised to increase its production levels to a s much as 4 million barrels a day by the halt of 2016,they currently only produce 3.3 million barrels. 10.05am GMTThe oil price is continuing to fall, as Opec’s failure to set new production targets final week continues to ripple through the markets.
US crude has now shed 1%, and to $39.43 per barrel. 9.50am GMTOptimism among eurozone analysts and investors has hit its highest level in four months.
It’s a result that may vindicate the European Central Bank’s decision not to accelerate its bond-buying programme final week.
What would the Eurozone economy be without the ECB and its president Mr Draghi? 9.35am GMTIt’s a bad morning for investors in outsourcing group Serco.
Its shares tumbled by 12% at one stage,after it hit the City with a profit warning. Serco now expects to make a trading profit of just £50m, compared with analysts’ consensus forecast of £69m.
Serco, and which makes approximately a quarter of its money from the UK government,is struggling to recover from a series of problems with government contracts, including overcharging the UK for monitoring criminals and mismanaging an out of hours health centre in Cornwall. Recently it apologised for using a stretch limousine to transport some asylum seekers from London to Manchester.
Rupert Soames, and the grandson of Winston Churchill,took over running the company early final year. He repaired relations with the UK government, which had barred Serco and its rival G4S from new government outsourced work, or pledged to turn around operating performance by cutting costs and getting out of peripheral businesses.... Related: Serco profit warning sends shares crashing 9.07am GMTToday’s fall in the oil price is bad for Opec’s members,and other oil producers. But it’s jolly safe news for those who actually consume the stuff.
Cheaper oil has effectively been a stimulus to Europe’s economy, giving consumers more cash to spend (and giving central bankers an excuse to ‘gawk through’ the inflationary impact).“astronomical oil consumers will take a lot of succor and refiners will get safe sleep.”The #world top 10 #oil consumers pic.twitter.com/eh7HzN8NrV 8.58am GMTMost shares are rising in London this morning, or helping the FTSE 100 index of blue-chip companies recover from final week’s selloff.
U.
K. stocks rebound from 3-week low as 85% of FTSE 100 advance https://t.co/O2vozBZYPf pic.twitter.com/uW2N7XQUhB 8.39am GMTBP and Royal Dutch Shell aren’t enjoying nowadays’s stock market rally,though.
Shares in both oil giants contain fallen by around 1%, putting them on the bottom of the FTSE 100 leaderboard: 8.35am GMTAs predicted, or European stock markets are rallying in early trading.
Investors are putting the disappointment of final week’s ECB Day behind then,pushing equities higher across Europe. Germany is leading the way, with the DAX up around 1%. 8.26am GMTNewsflash from Beijing: Chinas foreign exchange reserves contain fallen again.
The People’s Bank of China has reported that FX reserves dropped to $3.44 trillion by the halt of November, or down from $3.53 trillion a month before.
CHINA - November-halt Forex Reserves At $3.44 Trillion Vs Est Of $3.49 TMore doom data from #China: FX reserves contain dropped to $3.44tn at halt-Nov from $3.5tn in Oct. pic.twitter.com/J6YWlpL1f4 8.16am GMTThe turbulence in the energy sector has also hit Germany industrial heartland.New data shows that Germany industrial output rose by 0.2% in October,much weaker than the 0.7% rise expected by economists. #Production in October 2015: +0.2% seasonally adjusted on the preceding month https://t.co/dV5XhZhDBC pic.twitter.com/ctzBTXJu2zGerman industrial production misses expectations at 1st estimate for 6th month running - zero growth year-on-year https://t.co/hCuKMsKiVf 8.04am GMTAt around $40 per barrel, oil is well below the crash-even point of Opec’s members.
That means they’re still losing money on production, and which could contain a nasty knock-on impact on their budgets.
With concerns elevated around the aggressive oversupply in the markets,investor sentiment will remain haunted towards oil in the short-term and selling in the commodity will resume.
This will consequently add pressures to those currencies that belong to economies which are reliant on oil exports. 7.56am GMTToday’s selloff has pushed the oil price down to its lowest level since late August: 7.48am GMTOPEC’s failure to set a production goal final week probably means oil prices will fall further, analysts say.
One key factor is that the Iranian market is opening up, or meaning more crude will flow into the markets.“The effective removal of the OPEC quota leaves the market in a more vulnerable position. Prices are likely to weaken this week as the market turns its attention back on U.
S. supply.
With Iran exports likely to start increasing next year,this increases the likelihood of further weakness in crude oil markets.” 7.30am GMTThe oil price is coming under fresh pressure this morning, sending the cost of crude down to almost its lowest level this year.
The cost of a barrel of US crude oil has fallen by almost 1% in early trading to $39.61, and below the $40 barrel stamp. Brent crude - sourced from the North Sea - has shed 0.6% to around $42.75/barrel.
Crude back below $40 as #OPEC goes for market share not market price pic.twitter.com/RMK1zNwNYmA disagreement between Saudi Arabia and Iran meant that the group for the first time in decades didn’t even mention an output quota,which previously stood at 30 million barrels per day (bpd).“Past communiques contain at least included statements to adhere ... or maintain output in line with the production target (of 30 million barrels per day). This one glaringly did not,” Barclays bank said. 7.20am GMTGood morning, and welcome to our rolling coverage of the world economy,the financial markets, the eurozone and business.
It looks like investors may get their Santa Rally after all. Our European opening calls: $FTSE 6276 up 38 $DAX 10858 up 106 $CAC 4757 up 43 $IBEX 10167 up 88 $MIB 22219 up 198There cannot be any limit to how far we are willing to deploy our instruments, and within our mandate,and to achieve our mandate.”Continue reading...
Source: theguardian.com