Article / 23 December 2015 at 8:04 GMT

Morning Markets: Oil scraping 'bottom' of the barrel

Former managing editor, / Saxo Bank


At 0755 GMT.


  • France: GDP (0745 GMT; published)
  • France: Household income (0745 GMT; published)
  • GB: Quarterly national accounts (0930 GMT)
  • US: Advance report on durables (1330 GMT)
  • US: New residential sales (1500 GMT)
  • US: Univ of Michigan consumer survey (1500 GMT)
  • US: EIA weekly stocks report (1530 GMT)

Editor's note: Morning Markets returns on December 28

Opec will produce its World Outlook for oil production in 2016 today and it is a racing certainty that the Saudi-Arabia-led cartel will do virtually nothing to give oil bulls any hope. Estimates vary but production is likely to surpass demand by at least 500,000 barrels/day through 2016 with some setting the bar as high as 2 million b/d.

The stark lack of equilibrium in oil fundamentals has already taken out the 11-year lows and the minor rally overnight notwithstanding, the prospects of sub-$30/b oil in the New Year are now beginning to look very real. The spread between Brent and WTI has been all but wiped out in the process as the European benchmark takes the brunt of the latest collapse in oil prices. 

This started as a trickle after the Opec meeting on December 4 but has gathered force ever since and it's going to get worse - perhaps much worse - before it has any hope of getting better. The much-watched EIA report is out at 1530 GMT today. A fall in stocks will do nothing more than give oil a brief fillip. A rise and heaven knows where this could take oil in the next day or two.

Asian equities were up overnight on the back of a Wall Street rally for a near two-week high but a lack of liquidity is dominating the market, especially with Japan shut down for a holiday. EURUSD is virtually static although a raft of data out of the US might move the needle slightly. Expect little today though. Everyone's bunkering down for the holiday.

Market signals

Asian session

  • Asian stocks rose amid growing investor confidence in the US and Chinese economies
  • The MSCI Asia Pacific ex Japan index increased 0.7% to at 0429 GMT
  • The Shanghai Composite Index had risen 0.2% at 0429 GMT
  • Copper and nickel both gained at least 0.4% during the Asian day
  • West Texas Intermediate oil rose 0.7% overnight to $36.38 a barrel
  • The S&P/ASX 200 Index closed 0.49% higher finishing at 5141.8 points
  • Barclays has given a below-consensus forecast for China's in 2016, with growth at 6%
  • The AUD got a boost overnight and was buying $0.7230 in early trading
  • South Korea’s won was up 0.1% at 0430 GMT and the NZd has risen 0.1%

From the Floor

From the Floor returns on January 4.

In opinion

Many are hoping that France's spending numbers will improve for November, but in the US it's the opposite - spending numbers are looking decidedly wobbly, says James Picerno.

Blimey O'Riley
It was a year that saw so much and could also mean we're in for a potentially rocky 2016, writes Michael O'Neill in his look back at a tumultuous year that saw equities pummeled by China.

Ignoring experience
Buying stocks you're familiar with like your Starbucks coffee or Apple iPhone usage won't assist you to analyse current valuations or predict share price development. But there is a systematic way of identifying stock candidates, says Andreas Clenow.


 This was the year China really became mainstream and the devaluation
of the yuan in August pummeled equities markets. Photo: iStock

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