The prior week saw the majority of market momentum emanating from the latest OPEC decision an announcement of suspension of output targets following indications that the group was producing well above existing quotas. The sharp uptick in crude oil production combined with near-record inventory levels for this time of year has added to mounting pressure on key oil benchmarks. Prices hit new multi-year lows last seen in 2009 on the back of increased selling interest amongst investors heading into the end of the year. With conditions unlikely to improve vis-à-vis production, the outlook remains gloomy for key energy benchmarks including natural gas. Aside from continued commodity deflation, the Reserve Bank of New Zealand opted to reduce interest rates to 2.50%, reiterating that conditions remain stable despite risks to the outlook on the back of weaker dairy prices and softer demand. In China, the trade surplus dipped sharply even though imports managed to rebound substantially while exports remain in contractionary territory. Producer prices however remained weak, contracting for 45-straight months in a growing sign that more stimulus might be just around the corner.
Crude Oil Breaks Key Levels
Weekly Report - 13/12/2015