OPEC deals oil another blow on the final busy day before Christmas

With the European markets on holiday tomorrow, and all Western markets closed on Thursday, today sees the final day for significant economic movement before Christmas Day.

This morning the FTSE was the biggest recipient of data, as the UK’s final GDP and current account figures came in mixed. Whilst the final Q3 GDP figures came in as expected at 0.7%, the current account fell to -£27 billion, seeing the pound fall against the dollar and the FTSE remain steady. These were the final significant figures for the UK this side of Christmas, and they aren’t exactly the highs the FTSE would have liked to go out on; however, with the FTSE’s trend of following the US markets, a strong performance from its American peers may see another afternoon rally from the UK index.

Despite disappointing housing figures yesterday, the US markets continued their comeback, with the Dow closing a whisker away from the hallowed 18000 level. The Dow Jones, especially, has returned to the highs the markets saw at the start of December, and is now in a position once again to test the strength of its resistance levels. As this afternoon sees a flurry of key US figures, including core durable goods orders, final GDP data and new home sales, the US markets have another chance to ride a wave of good figures and break its recent records. With only US unemployment claims arriving tomorrow, these numbers are the last significant test for the Dow et al. before they can relax for Christmas.

The Eurozone has been the quietest of the major indices zones this week, with only a few points of data released. More importantly for this area are the Russia rouble crisis and the ongoing attempts by Greece to avoid a full-blown snap election. With many analysts predicting that Greek MPs will fall short of the votes needed to support president candidate Stavros Dimas, more destabilisation could be on the way for Greece, and by extension, the Eurozone.

On top of this comes the continued saga of Russia’s ever-growing financial crisis; whilst the rouble is regaining ground against the dollar, with Trust Bank having to be bailed out yesterday, Russia’s economy is a very precarious house of cards, one blow away from collapse.

Finally, oil received another setback this morning, as Saudi Arabia reaffirmed its commitment to not provide any aid whatsoever to its key commodity, this after Brent Crude continued to retrace its step to reach $59.92. Saudi oil minister Ali al-Naimi stated that, even if oil was to plummet as low as $20 per barrel, OPEC would not cut production. However, it is important to remember that this comment was the Saudis talking on OPEC’s behalf. Whilst its influence in OPEC is unmatched, Saudi Arabia may soon realise that its wants and needs can only go so far, and if oil was to fall that low, the Saudis may face opposition it finds hard to overcome.