Trouble is piling up for risk assets. Sentiment was knocked yesterday by a trifecta of simmering geopolitical tensions, the raging COVID pandemic and disappointing US jobs data. Tensions between the US and China have risen of late after the latter was ordered to close its consulate in Houston. This set the stage for a tit-for-tat [...]
It is being fought on two fronts: central banks and governments against COVID-19 and Saudi Arabia against Russia. After the Fed and the Bank of England introduced emergency rate cuts it was the turn of the ECB. The European Central Bank will provide banks with loan and would increase its bond purchases by €120 billion [...]
The World Health Organization now describes the coronavirus as pandemic. It warns that more countries will join Iran and Italy that are already in the frontline of the disease. The announcement triggered a chain of events that sent investors in the financial and commodity markets looking for shelter. The new label will neither accelerate nor [...]
After a drop of more than $10/bbl it is not unusual to see some kind of technical rebound. Any positive development will get a bigger attention than it otherwise would deserve, and shorts will feel tempted to cover. It was clearly the case yesterday as WTI recovered $3.23/bbl and closed at $34.36/bbl. Brent was lagging [...]
The attack on Saudi oil installations is still not a too distant memory. It happened over a weekend and the gut reaction of the market pushed oil prices more than $10/bbl above the previous Friday’s settlement level. The rally, however, did not last and Brent closed almost $3/bbl off the day’s high and never went [...]
The least expected happened on Friday. The proposed reduction in OPEC+ production was rejected by Russia. It would have taken the combined cut up to 3.6 mbpd from the 2016 level. The proposal, based on the recommendation of the Joint Ministerial Monitoring Committee, pushed for an extra 1.5 mbpd decrease in the group’s production level [...]
Decision Day. Crunch time. Moment of truth. Call it what you will, the oil market is at a critical junction. OPEC and its non-OPEC allies will meet today to finalise a supply response to the mounting coronavirus crisis. This follows yesterday’s gathering of the 13-member OPEC in which it acknowledged the adverse impact of the [...]
There are two key takeaways from the recent market performance. The first one is that central banks’ action is not es effective as hoped and the second one is that the coronavirus epidemic is likely to have a longer-term negative effect on the global economy and oil demand. After the Fed announced its surprise 0.5% [...]
Rarely does a day go by without Donald Trump berating the Federal Reserve for not delivering more monetary easing measures. Yesterday was no different only this time the US President got his wish. The Fed shocked investors with an emergency rate cut of 50 basis points to counteract the impact of the coronavirus. This was [...]
Markets work in mysterious ways. The epidemic that originated from China shows no signs of abating yet risky assets performed one their biggest daily jumps yesterday. The US stock markets strengthened around 5% yesterday and European stock index futures are also on the rise this morning. Oil tracked equities and WTI gained nearly $2/bbl to [...]
