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China’s Economy Shows Few Signs of Revival

BEIJING—A large jump in brokerage fees from stock-market turmoil in the final weeks of June is likely to show up as a modest but badly needed bump in China’s second-quarter growth. Beijing had hoped that its economic groundwork in recent months would start paying some visible dividends, and that a pickup in U.S. and European demand would boost exports. It will have to wait. Economists point to few signs of a decisive turnaround in the second quarter, which started against the backdrop of a broad stock rally and ended under the shadow of that rally’s collapse. The broader economy veered little from its recent slowdown course, underlining both how divorced the stock market remains from economic fundamentals as well as the economy’s sluggish response to the government’s efforts to revive it. China is targeting growth of about 7% for the year; a reading below that level in the second […]

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China growth beats forecasts as activity warms up

China’s economy grew an annual 7 percent in the second quarter, steady with the previous quarter and slightly better than analysts’ forecasts, though further stimulus is still expected after the quarter ended with a stock market crash. Monthly activity data, released alongside the GDP report, also beat expectations across the board to show signs of a rebound, with factory output hitting a five-month high, following reports of increased bank lending on Tuesday. It has been a difficult year for the world’s second-largest economy. Slowing growth in trade, investment and domestic demand has been compounded by a cooling property sector, deflationary pressure, and the recent equity market panic, so signs of improvement may help buttress faltering investor confidence in the effectiveness of Beijing’s management. Beijing will still need to provide liquidity to buttress its still-rickety stock exchanges – which the statistics bureau described as key to economic stability – and […]

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China stocks drop again, positive data shrugged off

Investors look at computer screens in front of an electronic board showing stock information at a brokerage house in Shanghai, China, July 14, 2015. China stocks tumbled in afternoon trade on Wednesday, despite surprisingly positive official economic data, as a recent post-rout, government-triggered rebound appeared to be running out of steam. The CSI300 index of China’s largest listed companies tumbled more than 5 percent at one point, but eased some losses to end the day down 3.5 percent, at 3,966.76. The Shanghai Composite Index lost 3.0 percent, to 3,805.70 points. The slide highlights the difficulty Beijing faces as it seeks to restore confidence in its stock market without signaling investors it is guaranteeing a zero-risk free for all, which would simply reinflate a rally that even regulators said had become too frothy. "Sentiment is still weak," said Du Changchun, analyst at Northeast Securities in Shanghai, adding that he believed […]

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China oil demand rises in June, car sales slump may cap growth

A worker examines a pumpjack at a PetroChina oil field in Panjin, Liaoning province June 30, 2014. China’s implied oil demand grew 3.5 percent in June, as rising air travel and vehicle usage boosted fuel consumption, but a drop in passenger car sales amid a recent stock market rout could limit demand growth over the next few months. China consumed roughly 10.56 million barrels per day (bpd) of oil in June, up from 10.20 million bpd in the same month a year ago and up 2.3 percent from 10.32 million bpd in May, according to Reuters calculations based on preliminary government data. That would mean China’s implied oil demand in the first half of 2015 was up 5.7 percent year-on-year at 10.43 mln bpd, using the preliminary data. Demand growth, however, may weaken after China’s automakers association cut its 2015 forecast for vehicle sales growth to a meager 3 […]

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South Korea’s June crude imports from Iran down 20 percent year-on-year

South Korea’s top refiner SK Energy’s main factory is seen in Ulsan, about 410 km (256 miles) southeast of Seoul, February 25, 2009. South Korea’s crude oil imports from Iran dropped 19.7 percent in June from a year earlier, and its shipments from the OPEC country in the first half of this year also declined 5.5 percent year-on-year, meeting international sanction requirements. Iran and six major world powers on Tuesday reached a nuclear deal under which the sanctions imposed by the United States, European Union and United Nations are set to be lifted in exchange for curbs on Iran’s nuclear program. "More oil from Iran will help already oversupplied crude markets become more favorable to buyers … from a long-term perspective, it is likely to help improve refining margins," said a Seoul-based source at one of the two South Korean refiners that import Iranian crude. Of four refiners in […]

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Emerging Stocks Decline as China Data Fail to Boost Confidence

Emerging-market stocks fell for a second day as industrial companies tumbled and better-than-estimated economic data in China failed to bolster investor confidence in the nation’s equities. Russia’s ruble weakened. Daewoo Shipbuilding & Marine Engineering Co. plunged 30 percent in Seoul on concern the company may report losses and could need to restructure its debt. The Shanghai Composite Index sank 3 percent and Hong Kong’s Hang Seng China Enterprises Index slid 1.3 percent. The ruble, South Africa’s rand and Turkey’s lira lost at least 0.3 percent versus the dollar. The MSCI Emerging Markets Index lost 0.2 percent to 939.03 at 9:07 a.m. in London. China’s gross domestic product expanded 7 percent from a year earlier in the second quarter, beating estimates for a 6.8 percent increase. The Shanghai Composite has slumped 25 percent in four weeks, the world’s worst-performing equity market. Federal Reserve Chair Janet Yellen addresses Congress while Greece’s […]

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White House Cuts Growth Forecast for 2015, 2016

The White House said it sees U.S. growth rising by just 2% this year before rebounding to 2.9% in 2016—down from its earlier forecast of 3% growth for both 2015 and 2016 released in February—after the economy stalled during the first quarter. The new estimate came Tuesday in the White House budget office’s “Mid-Session Review,” which updates the economic and budget projections it made at the beginning of the year. The new growth forecast largely reflects the current thinking among private economists. The economy contracted at a 0.2% seasonally adjusted annual rate in the first quarter. The White House forecasts for gross domestic product, the broadest measure of goods and services produced across the economy, estimate the change in the fourth quarter from the prior-year period. At the same time, higher federal revenues and lower-than-expected government spending has helped to trim the deficit. The White House estimates that the […]

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Permian’s Pancaked Rock Layers Make It the U.S. Oil Patch King

In West Texas, the king of the U.S. oilfields is proving to be the safest investment for explorers. The Permian Basin added the most drilling rigs of the four major U.S. oil plays last week. Output from the region, which stretches into southeastern New Mexico, will rise by 5,000 barrels a day in August, the Energy Information Administration estimates. The Eagle Ford in south Texas, the Bakken region of North Dakota and the Niobrara of Colorado and Wyoming will all drop by at least 20,000 barrels. WPX Energy Inc. entered the region with Tuesday’s $2.35 billion deal to buy RKI Exploration & Production LLC. WPX and other explorers are turning to the Permian to drill into the large number of oil-soaked underground rock deposits stacked like pancakes. “What the Permian shows is the opportunity, and the opportunity is driven by the stacked reservoirs,” Rick Muncrief, chief executive officer at […]

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Sabine Files for Bankruptcy in New York Amid Falling Oil Prices

Sabine Oil & Gas Corp., the Houston-based exploration and production company that merged with Forest Oil Corp. last year, filed for bankruptcy amid falling oil prices. Sabine had about $2.5 billion in assets and about $2.9 billion in liabilities as of May 31, according to Chapter 11 filings in bankruptcy court in New York. The company continues to discuss a consensual financial restructuring plan with lenders and debt holders, it said in a statement. Sabine has sold assets, cut expenses for drilling and new wells and froze wages to cope with a sharp decline in energy prices, according to court filings. “Given the severity of the current market conditions and their impact on the company’s cash flow situation, the company has been unable to right-size its balance sheet through cost-cutting and self-help measures alone,” Chief Financial Officer Michael Magilton said. The case is in re Sabine Oil & Gas […]

Posted On : Published By : Tom Whipple