Spreadex Market Update
US Shale production growth and ECB resist calls for policy tightening
US shale oil producers are planning for a large production increase outside the Permian Basin in Texas. The news comes as little surprise and adds to the growing resurgence which has confounded OPEC's strategy to tighten global supplies. Many shale firms are determined to rebound from a two-year price war with OPEC, and are planning to expand production in North Dakota and Oklahoma.
Among these firms are Hess Corp, Chesapeake Energy Corp, Continental Resources Inc who detailed their growth plans at an energy conference in Houston this week. The projects they outlined would result in a steady supply of American crude exports throughout the next decade. All this has resulted in a boost of 8.2 million barrels to domestic stockpiles and a consequential 5% drop in oil prices.
"The European Central Bank is set to ignore pleas for a tightening to monetary policy and instead keep any plans firmly on hold."
Elsewhere, The European Central Bank is set to ignore pleas for a tightening to monetary policy and instead keep any plans firmly on hold. This comes at a time when eyes are nervously cast towards the high-risk elections in France and the Netherlands and the upsurge in populist sentiment that threatens to derail the recovery.
The ECB also points to weak underlying price growth and a still fragile recovery as reasons to hold back. However, it is not all doom and gloom, indeed economic sentiment is at a six-year high. Trade is also rebounding, services and manufacturing output are rising, and unemployment is at its lowest since 2009.
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