LONDON: Oil prices resumed their slide on Tuesday, with US crude falling below $37 per barrel for the first time since early 2009, amid fears the world was running out of capacity to store crude as a global glut intensifies. The global oversupply is being compounded by OPEC's failure last week to agree a production ceiling, with members Iran and Iraq promising to ramp up output and exports next year. Benchmark Brent and WTI futures both fell more than 6 per cent on Monday, and on Tuesday they hit fresh lows last seen during the credit crunch of 2008/09.
NEW YORK: World stock markets plunged on Monday, as a near 9 per cent dive in China shares and a sharp drop in the dollar and major commodities sent investors rushing for the exit. The Dow Jones Industrial Average dropped more than 1,000 points as Wall Street opened, and the benchmark Standard & Poor's 500 index slid more than 2.5 per cent, a drop that puts it nearly 10 per cent below its record high.
LONDON: Alarm bells rang across world markets on Monday as a near 9 per cent dive in China shares and a sharp drop in the dollar and major commodities panicked investors. European stocks were almost 3 per cent in the red and Wall Street was braced for similar losses after Asian shares slumped to 3-year lows as a three month-long rout in Chinese equities threatened to get out of hand. Oil slumped another 4 per cent, while safe-haven government US an German bonds and the yen and the euro rallied as widespread fears of a China-led global economic slowdown and currency war kicked in.
With oil moving back above $60 a barrel today for the first time in 2015, perhaps marking the end of the price collapse that began last June. But does the rally reflect increased optimism over global demand or supply constraints? Or could the answer be, neither?
When ISIS dared to steal and sell oil at below market rates, they were dire pirates that needed to be destroyed (and anyone who dared to buy it was pariah). So when, as Bloomberg reports, crude sold at the wellhead in the Bakken shale region in North Dakota fell to $49.69 a barrel on Nov.
Unlike Monday's global PMI deterioration (which sent markets around the globe soaring), there was little in terms of macroeconomic data overnight (German IFO earlier missed on expectations and business climate but beat on current assessment) so the "market made the news." These came most from the USDJPY which has continued to fall, sliding to 111.85 overnight, and dragging the Nikkei to a -0.4% drop.
LONDON: World shares weathered soft readings on Chinese and Japanese manufacturing which served to recharge expectations of more policy stimulus there, though lacklustre euro zone data soured the mood on Thursday. European stock markets initially opened higher, spurred by multi-year highs in Asia, but sluggish euro zone and German purchasing manager data and conflicting numbers from France sent indexes into the red. Stock index futures suggested U.S. markets would maintain the negative trend.
As oil production swells, demand falters and prices slide, the global oil market appears on the verge of a pivotal shift from an era of scarcity to one of abundance.
Oil prices have fallen as much as 20% since June, despite a host of rising supply risks, leading more investors and traders to consider whether 2015 is the year in which the U.S. shale oil boom finally tips the world into surplus.