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Oil bears firmly in control

Published Tuesday, January 13th, 2015

Equity indices suffered a volatile start to the week as yet another big slump in oil prices weighed on investor appetite for risk and dragged energy shares lower. Risk assets did appear to be rebounding in early trading on hopes that the Federal Reserve would extend its time frame for the eventual normalisation of interest rates following last week’s mixed US jobs report. However, fears of a global economic slowdown compounded by further oil price weakness along with concerns that the latest US corporate earnings will fall short of expectations ensured that caution dominated market sentiment. Risk aversion looks set to continue this morning as oil resumes its downward path whilst investors shrug-off stronger-than-expected Chinese trade data.

Global oil supply shows no signs of let-up, so far

This week will see the release of the latest set of monthly reports on supply/demand. We will find out whether there is any recognition that global demand has been stimulated by falling oil prices over the last month and whether OPEC believes that it has started to reclaim market share at the expense of non-OPEC suppliers. The EIA will release its report this afternoon, OPEC on Thursday and the IEA on Friday. Below we take a look at the latest available supply data, recent changes in Official Selling Prices from Middle Eastern oil producers and how slumping oil prices have altered price forecasts for this year.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.