The abrupt fall in crude oil prices, considered a blessing not so long ago, is now seen as increasingly troubling. West Texas and Brent crude prices fell from over $100 a barrel in 2014 to just $30 last Friday, a 12-year low. Although the drop in crude waw initially welcomed, many fear that current low prices may bring with them more problems than solutions.
John Feffer | The market was supposed to save the planet. That, at least, was the argument of many economists grappling with the problem of climate change. As fossil fuels became scarcer, they pointed out, the price of oil and natural gas would go up. And then other options, like solar and wind, would become cheaper, particularly as investment flowed into that sector and drove down the cost of new technologies.
According to Afi analysts, the trend in crude prices is being clearly affected by the fact that there are continuous upward revisions to crude supply worldwide, while demand is not picking up with the same intensity. Oil futures are currently pricing in long term levels of around 55-60 bpd, 20 bpd lower than at the start of 2015.
BARCLAYS | On 1 December 2015, the day after the IMF Board voted to include China’s currency in its Special Drawing Rights (SDR) basket, we hosted a conference call with Barry Eichengreen, a professor at Berkeley and an expert in the field of international economics , to put China’s SDR inclusion in perspective. Highlights from the call are below.
UBS | Last week’s 168th ordinary OPEC meeting in Vienna concluded without the group agreeing on any meaningful change in strategy. Contrary to an earlier wire report that the group was to lift its target outp ut ceiling to 31.5Mb/d the defining feature of the official release was the lack of any explicit reference to either the quota or to actual production.
The euro started off the week trading momentarily below 1,06 dollars, its lowest exchange rate since mid-April and bringing it ever nearer to parity with the “green back.” The question being asked by many investors now is whether the euro will achieve parity with the dollar in 2016. There are all sorts of forecasts, but the current majority opinion is that the euro has very little downside left.
The major economies are now characterised by desynchronised economic cycles, with divergent policy regimes. This complicates the equity investment decision. Europe may be a relative winner, but too much of the globe is seeing financial conditions tighten, against lacklustre growth, to be optimistic on directional trends. We see downside risk through the opening months of 2016. The European economy is moving in the right direction and further ECB action promises…
The investor (or fund manager) who wants to have an idea of how the Spanish stock market is doing by looking at the sector index could be stepping into a trap. There can be a vast difference in profitability between one stock or another in the same sector.
Lately the markets are moving more to the beat of the big central banks’ drums than to the trend in corporate earnings. That’s the only way to explain how the Ibex is saving face, given that third quarter results presented so far (by 20 out of the 35 companies in the index) are 16% lower than expected, according to Bloomberg.