Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

‘Green Shoots’ Turn Oil Prices Red

By London Capital GroupMarket OverviewMar 08, 2017 01:26PM ET
www.investing.com/analysis/%EF%BF%BD%EF%BF%BD%EF%BF%BDgreen-shoots%EF%BF%BD%EF%BF%BD%EF%BF%BD-turn-oil-prices-red-200178224
‘Green Shoots’ Turn Oil Prices Red
By London Capital Group   |  Mar 08, 2017 01:26PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Markets Ignore Budget, Wait For ECB

Some confidence returned to stock markets on Wednesday as official UK growth targets were lifted and China reported an unusual trade deficit thanks to strong internal demand. The outside chance that the European Central Bank could announce a surprise tapering of its bond-buying program at its policy meeting on Thursday has some investors sitting on the side-lines.

Investors anticipating higher US interest rates sent financial stocks higher, helping the FTSE 100 to modest gains. Worldpay (LON:WPG), Barclays (NYSE:BCS_pd) and Standard Chartered (LON:STAN) were all top risers while L&G fell after poorly received results. Apart from skimming a few pounds off the top of dividend income, the first and last spring budget from Chancellor Philip Hammond was a bit of a damp squib. In a time of Brexit uncertainty, a nice boring budget from Spreadsheet Phil was probably the order of the day.

Trump Delivers Jobs, USD Jumps

The US dollar hit a three-week high against the yen, gold prices dropped to the lowest in a month and US treasury yields leaped after data showed the biggest monthly private company job gains in six years. Data released on Wednesday showed US private businesses added 298,000 jobs, over 100k more than consensus forecasts.

ADP is not historically the best predictor of the more widely watched data from the BLS. Nonfarm payrolls on Friday will be the last possible stumbling block to a March rate rise. Given the strength of the ADP data, it would take a massive statistical aberration for the NFP to miss to such an extent that would justify keeping rates steady again. Odds of a March rate hike have hit 97% according to Fed funds futures, making a rate hike all but a certainty.

It’s only one month’s data -- but so far, Donald Trump is delivering on his promise to get Americans back to work. Whether The Donald’s brazen tactics for bringing jobs back home will work in the long run is hotly debated, but it’s not a coincidence that his first full month in office coincided with a stronger monthly rise in jobs than the last six years under Obama. If this employment data is a sign of things to come for the US economy, then the rise in stock markets in the context of higher interest rates make a lot more sense.

‘Green Shoots’ Turn Oil Prices Red

Oil markets looked soft for a second day on Wednesday after data showed another weekly build in US inventories. The resurgence of US oil production in conjunction with a steady expansion in oil rigs is undermining confidence that OPEC output cuts will end the supply glut.

Saudi Arabia’s oil minister Khalid al-Falih told a conference of oil magnates in Texas that the OPEC deal was sowing “green shoots” for the US shale industry. Mr. Falih is voicing what many oil traders have been thinking. Indeed the concern that cutting output would play into the hands of producers who went part of the agreement was what led to Saudi Arabia’s recently abandoned policy of non-intervention.

US shale as well as other beaten-down parts of the oil industry including in the North Sea are coming back to life. New efficiencies, including a lot of job cuts mean an oil price above $50 per barrel is profitable. The three month consolidation in the oil price that chartists would recognize as a triangle pattern is overdue a breakout. Simply complying with previously agreed cuts may not be enough to prop up oil prices.

‘Green Shoots’ Turn Oil Prices Red
 

Related Articles

‘Green Shoots’ Turn Oil Prices Red

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email