Brent futures plunge below $80 per barrel

Thursday, November 13, 2014

Brent front month futures breached below $80 per barrel for the first time since October 2010, suggesting further downside momentum in the oil market. Brent futures have retreated more than $35 in nearly 5 months, weighing heavily on market sentiment. WTI front month futures plunged towards $76 per barrel in early trade this morning ahead of the release of key US economic data.

Brent front month futures plunge below $80/barrel - weekly chart over 5 years

CLZ4 Comdty (WTI CRUDE FUTURE  D 2014-11-12 08-57-37

According to Financial Times, Saudi Arabia’s oil minister Ali al-Naimi broke his silence yesterday and dismissed claims that the Gulf state had triggered a “price war”. Furthermore, the International Energy Agency reported that investment in US shale oilfields will decline by a tenth in 2015 if crude oil prices continue to trade about $80 per barrel.

China’s industrial production rose 7.7% in October y/y, compared to 8.0% in September missing analysts’ expectations of 8.0%. In addition, retail sales y/y climbed by 12% in October in line with analysts’ estimates and fixed asset ex rural increased by 15.9% in October versus a 16.1% rise in September. Japan’s industrial production surged higher by 2.9% m/m in September from a 2.7% previously, while capacity utilisation rose strongly by 3.6% in September against a -1.7% decline in August. Following the solid Japanese economic data, the Nikkei index rallied strongly almost 200 points (+1.15%) towards 17,400. The Hang Seng index edged higher adding more than 80 points (+0.35%) to breach above 24,000.

Nikkei Index

NKY Index (Nikkei 225)  Daily 30 2014-11-13 08-50-42

RICS house price balance increased by 20% in October, down from 30% in September missing analysts’ estimates of a 25% rise. Germany’s CPI fell by 0.3% m/m in October inline with analysts’ estimates. The European equity markets opened the session in positive territory, as the CAC, DAX, IBEX and London equity benchmark climbed higher adding between 0.15% and 0.5% in early trade.

DAX Index 

DAX Index (Deutsche Boerse AG Ge 2014-11-13 08-51-19

Events for today:

 

0530

CN

Oct

Retail Sales

0530

CN

Oct

Industrial Production

0530

CN

Oct

Fixed Assets

0001

UK

Oct

RICS House Prices

0430

JP

Sep

Industrial Production

0700

DE

Oct

CPI

0900

EZ

Nov

ECB Monthly Report

1330

US

w/e

Jobless Claims

1530

US

w/e

EIA Nat Gas

1900

US

Oct

Fed Budget

LT

 

Dec

Brent Crude (ICE)

All times UK Local Time

 

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