WTI futures plunge below $60/barrel adding pressure to global markets

Friday, December 12, 2014

The sharp sell-off continues in the oil market as WTI front month futures breached key support at $60/barrel yesterday and finished the trading session at $59.95. This morning, WTI futures extended losses below $59/barrel, verifying the sharp down trend in the oil market. Please note that WTI front month futures have retreated over $18 in three weeks from a high of $77.02 on 24th November down to $58.80 this week. Brent front month futures also declined sharply yesterday to test a low at $63.05/barrel.  

WTI front month futures chart over 2 years

CLF5 Comdty (WTI CRUDE FUTURE  J 2014-12-12 08-43-59

Brent front month futures retest $63/barrel

COF5 Comdty (BRENT CRUDE FUTR  J 2014-12-12 08-45-27

Japan’s industrial production increased 0.4% m/m in October compared to 0.2% in September, while capacity utilisation rose 0.7% in October from 3.6% in September. The JPY rose to 118.70 against the USD, following the release of the optimistic data. The Nikkei index gained over 100 points (+0.66%) towards 17,370.  

In China, retail sales rose 11.7% y/y in November, beating analysts’ expectations of 11.5%. Industrial production increased by 7.2% y/y in November compared to 7.7% in October. Following the modest economic releases, the Hang Seng index slid slightly lower by 0.27% to finish at 23,249.20.   

Hang Seng index    

HSI Index (Hong Kong Hang Seng I 2014-12-12 08-47-06

Gold retreated towards $1220/ounce, struggling for clear direction. However, silver edged higher in early trade this morning holding above $17. The release of Eurozone’s industrial production and UK’s construction output data could draw investors’ attention. In the US, market participants will be keeping an eye on the PPI final demand data as well as current market conditions and expectations from the University of Michigan/ Thomson Reuters survey.     

 

Events for today: 

0430

JP

Oct

Industrial Production

0530

CN

Nov

Retail Sales

0530

CN

Nov

Industrial Production

0930

UK

Oct

Construction Output

1000

EZ

Oct

Industrial Production

1000

EZ

Q3

Employment

1330

US

Nov

PPI Final Demand

1455

US

Dec

Michigan Survey

 

All times UK Local Time

 

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