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Greece 29 – Germany 0

Published Wednesday, April 22nd, 2015

It’s not a football score but the differential available yesterday between German and Greek debt due to mature in 2017. The Greek government is squeezing cash out of every nook and cranny to pay pensions and salaries. Big payments are due on May 1, May 8 and May 12 to creditors. There is talk of Greece defaulting but still being able to remain in the eurozone. There is no satisfactory outcome only bad, awful and disastrous and the smart money is probably still betting on some sort of unconvincing compromise.

Greek bank shares fell to an all-time low in response to the possibility of the ECB capping emergency lending assistance (ELA) because, as money pours out of the country, Greek bank solvency is damaged. Bank shares are down 50% since the beginning of the year and the Athens General Index lost 3.3% yesterday taking it to its lowest level since September 2012. The sudden imposition of capital controls is a real threat.

Crude oil gave away over $1 bbl with Brent losing $1.37 bbl (62.08) and WTI $1.27 bbl (56.01). The Iranian Oil Minister declared that he expected “OPEC to pave the ground for an increase of Iran’s oil production”. They are doing that by increasing production to protect market share and maximise revenues. Hardly the preparation he would want. After the close the API figures contradicted Genscape numbers by showing a weekly crude build of 5.5 million bbls with +570,000 bbls at Cushing. Reuters build expectations were 2.9 million bbls. Distillate built 1.7 million bbls and gasoline 1.1 million bbls. Refinery runs were 91.4%.

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Posted by David Hufton