Oil price slides after Opec fails to agree production cuts – business live

Discussion in 'Market News' started by Lily, Dec 7, 2015.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    All the day’s economic and financial news, as the oil price comes under renewed pressure after last Friday’s Opec meeting didn’t deliver a deal

    9.07am GMT

    Today’s fall in the oil price is bad for Opec’s members, and other oil producers. But it’s jolly good 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 ‘look through’ the inflationary impact).

    “Big oil consumers will take a lot of succor and refiners will get good sleep.”

    The #world top 10 #oil consumers pic.twitter.com/eh7HzN8NrV

    8.58am GMT

    Most shares are rising in London this morning, helping the FTSE 100 index of blue-chip companies recover from last 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 GMT

    BP and Royal Dutch Shell aren’t enjoying today’s stock market rally, though.

    Shares in both oil giants have fallen by around 1%, putting them on the bottom of the FTSE 100 leaderboard:

    8.35am GMT

    As predicted, European stock markets are rallying in early trading.

    Investors are putting the disappointment of last week’s ECB Day behind then, pushing equities higher across Europe. Germany is leading the way, with the DAX up around 1%.

    8.26am GMT

    Newsflash from Beijing: China’s foreign exchange reserves have fallen again.

    The People’s Bank of China has reported that FX reserves dropped to $3.44 trillion by the end of November, down from $3.53 trillion a month before.

    CHINA - November-end Forex Reserves At $3.44 Trillion Vs Est Of $3.49 T

    More doom data from #China: FX reserves have dropped to $3.44tn at end-Nov from $3.5tn in Oct. pic.twitter.com/J6YWlpL1f4

    8.16am GMT

    The 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 previous month https://t.co/dV5XhZhDBC pic.twitter.com/ctzBTXJu2z

    German industrial production misses expectations at 1st estimate for 6th month running - zero growth year-on-year https://t.co/hCuKMsKiVf

    8.04am GMT

    At around $40 per barrel, oil is well below the break-even point of Opec’s members.

    That means they’re still losing money on production, which could have 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 GMT

    Today’s selloff has pushed the oil price down to its lowest level since late August:

    7.48am GMT

    OPEC’s failure to set a production goal last week probably means oil prices will fall further, analysts say.

    One key factor is that the Iranian market is opening up, 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 GMT

    The 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, below the $40 barrel mark. 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/RMK1zNwNYm

    A 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 have 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 GMT

    Good 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 198

    “There cannot be any limit to how far we are willing to deploy our instruments, within our mandate, and to achieve our mandate.”

    Continue reading...

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