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Problems build for the EU

Published Tuesday, December 22nd, 2015

Brent broke below the Dec 2008 low of 36.20 to 36.04 yesterday but did not close below, settling at 36.35 (-53). WTI is still some way above its Dec low of 32.40 falling to 35.35 and closing at 35.81 (-25).

News was sparse. The Spanish election result was indecisive as expected. The incumbent government has lost its majority so there is a risk of a lurch to a left-leaning coalition in much the same way as Portugal. It just adds to the many potential problems the European Union faces next year. The Greek Prime Minister says that he does not want the IMF involved in his country’s third bailout. He claims to be “puzzled by the unconstructive attitude of the fund on fiscal and financial issues”. Germany has made IMF participation a condition of the deal.

Goldman’s latest oil price forecasts put it in the bull category compared to current levels and the forward futures curve. They are forecasting 6 and 12 month Brent at $50 and $54 bbl respectively compared to July 2016 at $40.28 and Dec 16 at $43.54 bbl at last night’s close. They put 6 and 12 month WTI at $45 and $50 bbl compared to July 16 at $39.80 and Dec 16 $42.41 bbl.

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Posted by David Hufton