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PVM Midday Report 12 January 2015

Published Monday, January 12th, 2015

Headlines

  1. Goldman trims 2015 Brent & WTI price forecasts to $50.40 & $47.15 bbl
  2. Russian daily oil production climbs to 10.67 mbpd in December
  3. Net length in ICE Brent rises by 24,598 lots to highest level since July 2014
  4. Kuwait mirrors Saudi move to raise its February crude OSP to Asian buyers
  5. China cuts retail prices for gasoline & diesel by $29 & $37 per tonne respectively

Fundamentals

Economy: European equities are starting the week on the front foot as investors surmise that Friday’s mixed US jobs data may cause the Fed to delay the eventual start of rate normalisation – the Eurofirst 300 is rallying 1%. Although job creation for December was seen as robust at 252,000, meek wage growth prompted fears of a potential underlying weakness in domestic demand and could force the Fed to maintain its low rate environment for longer than expected. The risk-on mood is being reflected by a firming of benchmark Treasury and Bund yields as is a softening of the yen against the dollar. Concerns that the latest quarterly earnings season which gets underway later today will fall short of expectations following a weak end to 2014 are doing little to halt the rush into risk assets. The divergence in commodity prices and the greenback has shown no sign of fading with the oil complex and gold heading further south as the dollar index extends recent gains by 0.3%.

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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.