Brent crude fell to a fresh 47-month low on Wednesday before recovering to around US$84 a barrel, as faltering global growth curbed demand for fuel at a time of heavy oversupply.
Oil saw its biggest daily fall in more than three years on Tuesday after the West’s energy watchdog slashed its forecasts for world oil demand for this year and 2015.
Core members of the Organization of the Petroleum Exporting Countries appear to be focused on fighting for market share rather than on cutting production to shore up prices.
Brent crude slid below US$100 a barrel on Monday for the first time in 14 months as Chinese and U.S. data pointed to slower-than-expected growth in the world’s top oil consumers.
Weak economic growth combined with ample supply has pushed oil prices down from a high for the year above US$115 hit in June, complicating efforts by central banks to ward off deflation and putting pressure on the budgets of major oil producers.
The last (or rather first) time China's National Audit Office conducted an audit of local government debt two years ago, in June 2011, it found that local governments and their various financing vehicles had taken on 10.7 trillion yuan of debt as at the end of 2010, which brought the issue of "underreported" high leverage in China to the fore.
West Texas Intermediate (WTI) crude hovered around its six-month low, and the Brent remained relatively stable after an eventful last week. WTI and Brent were trading at $97.5 and $104 per barrel, respectively, by the end of last week. The US is set to announce an improvement in its economic status, but signs of weak US fuel demand also contributed to the WTI’s 4.1% decline last week.
Prime Minister Stephen Harper endorsed the Bank of Canada’s decision to stop warning about higher interest rates and predicted that naysayers on the economy will be proven wrong in 2014.
Harper, in an interview Thursday at his Ottawa office, said central bank Governor Stephen Poloz’s policy is appropriate, and that critics focusing on a sliding currency and a weak December jobs report are being short sighted.
Asian markets are higher in overnight trading. Chinese stocks were up in early trading but turned red after inflation data showed that consumer prices climbed 2.7% and producer prices fell 2.7%. The decline in producer prices highlighted China's excess capacity problems.
I try to find global economic data on manufacturing and manufacturing jobs, but it isn’t easy. This is one of the areas I will be working on with the time I have freed up by moving to Malaysia (and taking a “sabbatical” [it isn't really a sabbatical, I guess, just me studying and working on what I want to instead of what someone pays me to]).