Spreadex Market Update
Doha disappointment causes market-wide wobble as Brent Crude falls 4.5%
Kicking off rather inauspiciously with Iran confirming it wouldn’t attend on Sunday, the meeting between OPEC and some of the world’s biggest oil producers in Doha ended up being effectively worthless. In a cabal-leading move Saudi Arabia, with little incentive to do otherwise, refused to freeze its oil output until its similarly-sized peers did the same. Yet realistically Iran remains the only country that matters in this oil saga, and until the newly un-sanctioned country agrees to halt its march to greater and greater daily levels of production there isn’t much chance of an Brent Crude-price rescuing deal being implemented.
As one would expect Brent Crude reacted rather poorly to the news, falling over 4.5% to teeter on the edge of $41 per barrel. However, that is lower than the 5.5% drop it started the day with, causing the FTSE, dragged down by its weighty commodity sector, to lessen its losses from around 1.5% to just shy of 1%. That still leaves the UK index under 6300 however, with little on the economic calendar to shift the conversation away from the Doha disappointment.
Jumping at the chance for a dip in the red the Eurozone also suffered this Monday morning, the DAX dropping by over 70 points with the CAC slipping by around 1%. Like the for the FTSE there isn’t much in the way of data for the region to contend with, leaving the oil output inaction to define the day.
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