• 4 minutes Some Good News on Climate Change Maybe
  • 7 minutes Cuba Charges U.S. Moving Special Forces, Preparing Venezuelan Intervention
  • 12 minutes Washington Eyes Crackdown On OPEC
  • 15 minutes Solar and Wind Will Not "Save" the Climate
  • 41 mins is climate change a hoax? $2 Trillion/year worth of programs intended to be handed out by politicians and bureaucrats?
  • 11 hours Why Trump will win the wall fight
  • 19 hours Prospective Cause of Little Ice Age
  • 7 hours students walk out of school in protest of climate change
  • 6 mins Ayn Rand Was Right
  • 18 hours L.A. Mayor Ditches Gas Plant Plans
  • 19 hours *Happy Dance* ... U.S. Shale Oil Slowdown
  • 9 hours Maduro Asks OPEC For Help Against U.S. Sanctions
  • 1 day IT IS FINISHED. OPEC Victorious
  • 23 hours And for the final post in this series of 3: we’ll have a look at the Decline Rates in the Permian
Alt Text

A New Twist In Europe’s Ongoing Gas Drama

New developments in the European…

Alt Text

Rosneft Boss Wants Russia Out Of OPEC Deal

Rosneft’s chief executive Igor Sechin…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Trending Discussions

More Rotten News For The Commodities Markets

There is a familiar feeling about today, as economic woes have clobbered the Chinese stock market overnight (hark, down 6.2%). Heavy selling ensued into the close, as a seeming lack of government intervention to support the market (?!) stoked concerns, and ergo, voracious selling. Nearly three-fifths of stocks finished limit down (-10%).

There appears to be three consistent themes in global financial markets at the moment: China worries, currency routs, and commodity sell-offs. We can tick all three of these boxes today, as WTI continues to retest 6-year lows, while copper and aluminum join its pity party.

As for currency routs, we are seeing weakness across the board once more, from the Turkish lira to the Malaysian ringgit. The below chart highlights the broad-based currency weakness seen across Latin America, stoked by economic frailty and expectations of U.S. rate hikes. Last week’s yuan devaluation will serve to reduce the purchasing power of China, something which will be felt most by the commodity-reliant economies of Latin America, who are key suppliers to the world’s second largest economy. Related: Germany Struggles With Too Much Renewable Energy

This economic frailty is being exhibited most starkly by Venezuela. Not only are shortages worsening for basic needs in Venezuela, but its inflation numbers have got so bad that it has stopped publishing them. Meanwhile, hundreds of thousands of people have taken to the streets in Brazil to call for the impeachment of President Dilma Rousseff amid an economic slump. Related: An Oil Price Spike Could Be Nearer Than You Think

Related: A Bargain In Oilfield Services Right Now

Back to black gold, Texas tea, and the tone for the day has been set by the overnight sell-off in Chinese equities, although prices are trying to pare losses. In terms of economic data flow, inflation data came in slightly above consensus in the UK, keeping the British economy neck-and-neck with the U.S. in terms of interest rate hike expectations. U.S. housing starts were just released, and hit their highest rate since 2007.

We get the weekly API inventory numbers out later this afternoon to bring focus back onto U.S. fundamentals. The mottled picture for U.S. production continues, as North Dakota surpassed a milestone in June, having drilled its 10,000th shale oil well. While EIA projections for September point to falling production from the Bakken, the North Dakota Division of Minerals reports June’s crude oil output increased to 1.21 million barrels per day, up 0.7% over May.

By Matt Smith

More Top Reads From Oilprice.com:

 




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News