oil prices

Euro Zone To See A “Mild Recession”

investment newsAccording to a top European Central Bank official, the euro zone is likely to see a “very mild recession” this year. The official also noted that higher oil prices should not have a long term impact on inflation.

Benoit Coeure, an executive board member of the ECB, told the Nikkei newspaper that euro zone growth was low due to the lack of bank credit and certain government budget cutting. The bank did raise its outlook for inflation due to the higher oil prices, but believes inflation will not have a long term impact. [Read more...]

Oil Prices Could Rise On Iran Oil Ban

Oil prices could go higher if Iran decides to cut oil exports to the EU and would hurt Europe’s economy according to OPEC Secretary General Abdalla Salem El-Badri.

Iran’s parliament is currently debating on a bill which would halt all oil exports to the EU immediately in response to EU sanctions against Iran which plans to ban imports of oil in July. An immediate export ban by Iran could be catastrophic to Europe’s economy as countries who rely heavily on Iranian oil are still in the process of finding alternate sources of oil before summer.

“Iran is exporting 400-500,000 barrels a day to the EU,” El-Badri said in an interview with CNBC. “Of course this quantity is going to affect the EU…you don’t want to add more problems to the EU. And for the Iranians also, to cut 400-500,000 barrels a day from their exports, it will affect their living.”

El-Badri wouldn’t speculate on whether Iran immediately ban oil exports to the EU. “Today…the market is stable, there is no shortage of oil anywhere in the world,” he said. “However, to take out 400-500,000 barrels a day in a matter of days, this will affect the price. Of course the price will go up. I don’t know how much.”

El Badri believes that oil prices can remain around $100 and that global economies can still grow. Anything higher than $110 could be a problem though he said.

If Iran were to close the Strait of Hormuz, oil prices could spiral out of control. The Strait sees about 17 million barrels of oil per day pass through, nearly 20% of global demand. Oil prices could see volatility in the near future depending on what happens with Iran and Europe.

Gold, Silver and Oil Jump As EU Bans Iranian Oil And Precious Metals Trades

Gold, silver and oil prices are rising this morning on reports the EU have agreed to ban imports of Iranian oil. Gold and silver rose following a Reuters report that the EU has agreed to freeze assets of the Iranian central bank and ban trades in gold and sliver with the Iranian central bank.

EU countries that have existing oil contracts with Iran will have until July 1 to complete them.

The EU will conduct a review of these new sanctions prior to May to see whether or not they are effective and if EU states can find sufficient oil from alternative sources. “There will be a review of the embargo before May,” one EU official said.

These sanctions come as the U.S. and other western countries increase pressure on Iran to halt or scale back its nuclear program. Western countries believes Iran is trying to build nuclear weapons, but Iran maintains it is a peaceful nuclear program meant only for energy.

“We want them to think ‘This is really getting very, very serious now’,” said one European diplomat.

These sanctions are not likely to have an immediate impact on Iran since existing contracts can be fulfilled.

While these sanctions hurt the Iranian government, they are also hurting the people of Iran who have seen the price of basic goods skyrocket in recent days. This could lead to more anti-US and anti-Europe sentiment from the Iranian people.

In response to Iran’s 2.6 million barrels of oil taken off the international market, Saudi Arabia said it will increase production by 2 million barrels per day.

Oil Prices Rise Over Iran and Nigeria Concerns

A slew of factors are sending oil prices above $103/barrel this morning. Tensions have grown between Iran and Western countries over their nuclear program with Iran threatening to close the Strait of Hormuz if its oil exports are impacted by U.S. and European sanctions.

Country wide protests in Nigeria over high fuel prices and government corruption has also sent crude higher today. Nigeria’s oil production appears to have been unaffected, but that could change as unions representing the oil workers have pledged to strike.

An improving U.S. economy will also send oil prices higher as demand will increase. Investors will be watching fourth quarter earnings from major companies starting this week to get a gauge of how well the economy is doing. “Oil feels like a market that wants to head lower but is being precluded by a steady tone to equities, particularly within the U.S. where good economic news continues”, energy analyst Ritterbusch and Associates said in a report.

China is seeing a six percent annual rise in oil imports. There was also a report out of Germany that China has reduced its imports from Iran.

“Because China has recently much reduced its imports from Iran due to disputes over payment, the country will need to source its demand elsewhere, which could drive prices further upward,” said a report from Commerzbank in Frankfurt.

Crude oil for February delivery is currently trading up 1.79% at $103.12.

Global Markets Have Best Week Since 2009

Markets around the world had their best week in more than 2 years following a coordinated move early in the week by central banks to cut borrowing costs for banks. The jobs reported late in the week also gave investors confidence that the U.S. economy will avoid another recession. And finally signs that Europe is working hard to get a deal ahead of a December 9 summit, which has been viewed as a make or break summit, also helped the markets.

On Friday, stocks ended the day flat after giving up nearly all of their gains as traders took profits ahead of the weekend. News of the unemployment rate dropping from 9% to 8.6% sent stocks up out of the gates, but soon came back down as investors realize the drop in the unemployment rate came from unemployed workers not looking for jobs anymore not the 120,000 job gain.

The week ahead will be all about Europe as the European Central Bank is expected to cut interest rates again next week. This will weaken the euro and make higher-yielding currencies more attractive.

“People have been playing up the fact that the euro zone is running out of time because their steps have been incremental and not big enough to calm fears,” said Mark McCormick, currency strategist at Brown Brothers Harriman in New York. “They are making progress, but everyone is looking for a game-changer.”

Gold prices rose the past week as well and saw its largest weekly gain in over a month. Gold was up 0.2% at $1,746.

Oil prices moved higher as well as a lower unemployment rates means more demand for oil, and tensions in Iran have increased over its nuclear program raising fears of supply disruptions.

Midday Commodities Round Up for Nov. 29

Before we jump into how the commodities market is doing, let’s take a look at the stock market. Stocks are trading higher today, but are not rallying as big as they did yesterday. The Dow is up 71 points, the Nasdaq is unchanged and the S&P is up 7 points. So what’s moving the market today – consumer data showed consumer confidence bounced back after hitting a 2.5 year low in November. Also, investors are hopeful for a solution in Europe soon on their debt crisis. Here’s how the commodities market is shaping up in midday trading.

Oil prices for January delivery rose today nearly $1 at $99.09. This jump comes as consumer confidence in the U.S. shot up, which means consumers will be more willing to spend money. Investors were also pleased to see Italy complete a bond auction although Italy had to pay yields above 7% which is an area many economists believe is unsustainable.

Gold prices are holding steady mostly today as they are down slightly at $1,709, a loss of $1.80 on the day. Silver prices are faring a little worse in midday trading, losing 1.23% at $31.76.

Overall it seems like the markets are taking a breather so far today after seeing a fast and furious rally yesterday. The Dow has rallied nearly 400 points in the past two trading sessions as investors were glad to hear some good news about the U.S. economy.

Oil Closes In On $100 as Global Markets Rally

Oil is closing in on $100 this morning following a global market rally that according to U.S. stock futures will continue for the U.S. markets. This rally comes after a better than expected start to the U.S. holiday season and hopes that European leaders can solve the sovereign debt crisis in Europe.

Benchmark crude for delivery in January is up $2.63 at $99.4 this morning. In London, Brent crude saw a rise of $2.14 at $107.99.

Oil is jumping today along with the overall market following news that a record 226 million shoopers visited stores and websites during the Thanksgiving holiday weekend. This was a 14 million increase from last year according to early estimates.

In Europe, there are reports of France and Germany bypassing European redtape to get nations using the euro to adhere to stricter rules for budget discipline. This helped boost confidence in investors who had none when it came to Europe.

Oil was over $100 at one point last week, but fell quickly as the continuing crisis in Europe undermines the entire global economy.

Oil Prices Trading Slightly Higher This Morning as Stock Market is Shaky

The price of oil is up in early trading this morning as traders are less concerned about the ‘super committee’s ‘ failure. While the super committee failed to reach an agreement on substantial debt reductions, there will be $1.2 trillion in automatic budget cuts triggered by this failure. Traders are realizing today that this doesn’t effect near term growth as the cuts are spread over 10 years and don’t take effect until 2013.

Crude oil prices for January 2012 delivery are trading up $1.24 this morning at $98.16. OPEC is looking to cut output at their December meeting according to Iraq’s Oil Minister Adbul-Kareem Luaibi. This comes as analysts expect demand for oil in Europe to dip. Luaibi expects oil to trade between $100 and $120. Chad is also reducing oil exports of Doba crude in January.

Expect stocks and commodities to have volatile trading during the holiday week. Holiday weeks are notorious for below average volume which increases volatility.

Stock Market Down Nearly 2% as Concerns Over Europe’s Debt Crisis Continue

The stock market today is down big with each of the major indexes down more than 1.5%. The Dow is down more than 180 points, the Nasdaq down 52 points and the S&P down 23 points. Europe continues to be the focal point for investors and not even positive U.S. economic data can budge the market.

Investors continue to worry about high yields on eurozone debt and there have been reports of Germany rejecting any talk of European Central Bank’s funding IMF EU bailouts. News closer to home was positive as jobless claims fell last week to a seven-month low. Construction saw good news as well with construction permits rising to their highest mark since early last year.

Another thing on the minds’ of investors is the upcoming deadline for the ‘supercommittee’ to deal with the U.S. debt. There hasn’t been much progress as decisions on how to deal with the deficit have broken along party lines.

In other news, Ocuppy protest clashes and arrests intensified today after protesters took to the streets in a nationwide ‘Day of Action.’ Many arrests were made in New York City and Dallas today.

Commodities also dropped today with oil and gold prices dropping more than 3%. Oil is down more than $3 and is trading below $100/barrel right now. Gold is down more than $50 at $1,720. Tomorrow will be another interesting trading day as Friday’s are historically down days as traders do not like holding over the weekend in case of any negative news hitting.

Early Morning Gainers: TSRA, NG, PEIX, PCRX, GMCR

The markets opened down today as Europe continues to weigh heavily on the markets. Signs that the euro debt crisis is spreading showed up today as the yield spread of 10-year French bonds over the German ones reached a euro-era high. The crisis has global reach as the Bank of Japan Governor, Masaaki Shirakawa, said the euro debt crisis is affecting Japan in multiple ways.

On the commodities side, oil prices hit $100 today and are currently trading at 101.43. This is ironic since the consumer price index dropped slightly in October and was attributed to lower gas prices. That won’t last long if oil prices continue higher.

Let’s take a look at a few companies bucking the overall down market trend.

Tessera Technologies Inc. (NASDAQ:TSRA) is up $3.14 at $17.61, a gain of 21.7% this morning. Earlier today, Tessera said Samsung extended its patent licensing agreement with the company through May 2017. TSRA has traded 1.3 million shares this morning, nearly triple its daily average volume. Tessera Technologies has a current market cap of 917.27 million.

NovaGold Resources Inc. (AMEX:NG) is up 12% this morning at $9.87. NovaGold announced a new CEO today and also announced billionaire, Thomas Kaplan, will become the company’s chariman. This is the one bright spot in gold today as gold prices are trading lower this morning. NG has traded 2.5 million shares so far today and should have no problem beating its daily average volume of 3.1 million shares. The company has a current market cap of 2.37 billion.

Pacific Ethanol, Inc. (NASDAQ:PEIX) is up 16.54% today at $1.55. Pacific Ethanol announced today it has retired in full its $35 million senior convertible notes on Nov. 15. As of Nov. 15, the company has 77.5 million outstanding shares. PEIX has traded 10.9 million shares this morning, already double its daily average. The company has a current market cap of 112.57 million.

Pacira Pharmaceuticals Inc. (NASDAQ:PRCX) is up 9.74% this morning at $7.55. The company announced the pricing of its public offering of 7 million shares at $6.50/share. PRCX has traded 1.6 million shares this morning, well above its daily average volume of 168 thousand shares. Pacira has a current market cap of 134.38 million.

Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) is up 6% at $50.43. GMCR is trying to bounce back after dropping from $70 to $40 in one day following poor earnings. GMCR has traded 6.3 million shares today and will beat its daily average of 7 million shares. The company has current market cap of 7.81 billion.

Oil Prices Stall At $109

On Wednesday, Brent crude oil prices hovered near $109 a barrel, as supply disruptions balanced against demand worries. Cautious investors are sitting on the edge of their seats anticipating the U.S. Federal Reserve Chairman Ben Bernanke’s speech on Friday in Jackson Hole, WY.

Oil trading is expected to remain cautious until Bernanke’s speech on Friday when investors are hoping for a clearer picture as to the state of the U.S. economy. On the demand side, investors are pinning their hopes on a rescue from the Federal Reserve and carefully watching the eurozone for a miracle to emerge.

‘’There is not a lot of impetus in either direction, with the market caught between problems with supply on one side – with Libyan exports offline and probably offline for some time – and weak economic growth and slowing demand,” said Tobias Merath, Head of Private Banking Commodity Research at Credit Suisse.

The underlying fundamentals issues are: a still uncertainty concerning Libyan exports, and a reduction in crude stockpiles in the U.S. The main focus being U.S. crude inventory data which is due to be reported by the Energy Information Administration (EIA) today.

There are predictions in the oil markets for a tighter oil supply in 2012. Analysts are looking for a surge in demand through the last quarter of 2011 which could bring an even tighter supply to the forefront and higher prices for consumers in 2012. The uncertainty in Libya still looms in the background, and the recent push by the people in the middle east countries toward democracy has countries like Saudi Arabia ,desperate to hold its power, trying to win the hearts of its people.

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