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Greek, Chinese and Puerto Rican Crises All Fall Short of Going Global

After economic turmoil erupted on three continents in recent weeks, a familiar consequence of past crises is notably absent: panic. In Europe, Greece veered dangerously close to exiting the euro. In China, a historic stock bubble appears to be deflating. In North America, Puerto Rico threatens one of the biggest government defaults in U.S. history. But there has been little of the global contagion that followed the deepening U.S. mortgage crisis in the fall of 2008 and previous Greek debt crises. On Friday, the Dow Jones Industrial Average, responding to signs that Greece may yet strike a deal to stay in the euro, climbed to within 3% of its all-time high. VIX, the stock market’s “fear gauge,” is below levels reached as recently as last December. Yields on bonds issued by Europe’s weaker countries have edged up, but by far less than Greece’s. Federal Reserve Chairwoman Janet Yellen , […]

Posted On : Published By : Tom Whipple
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WoodMac: $60 Barrel Forecast Hinges on Greece Exit, China Market Trouble

Analyst firm Wood Mackenzie said Friday that it would maintain its July 2 forecast of an average Brent crude oil price of $60/barrel, provided that Greece remains in the Eurozone and that the recent rout in China’s equity market doesn’t reduce China’s oil demand. Global oil prices have declined in response Greece’s no vote on July 5 on further austerity measures, and continued to fall on news of China’s stock market rout. On Friday, Greece’s Prime Minister Alexis Tsipras submitted a plan for an economic overhaul of Greece following the Greek population voting down a plan drafted by international creditors for the repayment of the nation’s debt. After incurring losses in eight of the previous 10 trading days, the Shanghai Composite on Thursday rose 5.8 percent to 3,709.33, while the smaller Shenzhen market rose 3.8 percent, The Wall Street Journal reported. But both the Shanghai Composite and Shenzhen markets […]

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IEA Says Oil Prices May Fall More Amid Slowing Demand

The International Energy Agency said Friday global demand for oil would slow down next year, as it warned that crude prices could resume a recent downward spiral. “The bottom of the market may still be ahead,” the agency said in its closely watched monthly oil-market report. In its first oil-consumption assessment for next year, the IEA—which advises industrialized nations on their energy policies—said global oil demand growth is forecast to slow to 1.2 million barrels a day in 2016. That compares with an average 1.4 million barrels a day this year. It said a return of Iranian oil and if Greece were to exit from the euro could put further pressure on oil prices—which have lost about 10% in the past month. Tehran this week failed to meet a deadline to clinch a nuclear deal with world powers. But if sanctions were lifted, it could raise exports immediately out […]

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IEA: OPEC production highest in three years

Paris-based IEA finds OPEC production at a three-year high, while long-term output from producers outside the group grinds "to a halt." File Photo by UPI/Gary C. Caskey PARIS, July 10 (UPI) — Output from Iraq, Saudi Arabia and the United Arab Emirates helped boost OPEC oil production to a three-year high, the International Energy Agency said Friday. The Paris-based IEA said in its market report for June production from the 12-member Organization of Petroleum Exporting Countries reached 31.7 million barrels per day, an increase of 340,000 bpd from May and the highest level in three years . A survey earlier this week from energy reporting service Platts found OPEC production in June surged for the fourth straight month . Saudi Arabia, the de facto leader of OPEC, produced an average 10.3 million bpd in June and Iraq increased production by 330,000 bpd to more than 3 million bpd. The […]

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Oil refiners’ ‘mini golden era’ will end soon: IEA

A gas pump is seen hanging from the ceiling at a petrol station in Seoul June 27, 2011. A brief period of high profitability for the world’s oil refineries is likely to come to an end as quickly as it began, the International Energy Agency (IEA) said on Friday. Weak crude oil and relatively high prices for gasoline, diesel and petrochemical feedstock have pushed up refining profits sharply over the last six months, helping oil companies cope with much lower profits from upstream production. In the first quarter of this year, combined profits for the likes of BP ( BP.L ), Royal Dutch Shell ( RDSa.L ), Exxon Mobil ( XOM.N ), Total ( TOTF.PA ) and Eni ( ENI.MI ) from refining and trading represented 60 percent of total earnings, compared with 18 percent last year, according to Reuters calculations. Crude oil prices collapsed from $115 a barrel […]

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As deadline looms, Kerry says U.S. in no rush to get Iran deal

The United States and other major powers are not in a rush to reach a nuclear deal with Iran, U.S. Secretary of State John Kerry said on Thursday, suggesting an accord was unlikely hours ahead of a deadline set by the U.S. Congress for a quick review. Adding to signs that a deal was not close at hand, a top adviser to Iran’s supreme leader was quoted by Iranian news agency Tasnim as saying Tehran’s "redlines" should be respected in talks aimed at a deal under which Iran would curb its nuclear program in exchange for sanctions relief. "A deal can be reached only if our redlines are respected," said Ali Akbar Velayati, the adviser to Supreme Leader Ayatollah Ali Khamenei. He also accused Kerry of making comments that were "part of America’s psychological warfare against Iran." Velayati’s reported remarks came after a senior Iranian official in Vienna accused […]

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Diplomats Allow Three More Days to Salvage Iran Nuclear Deal

Diplomats gave themselves three more days to salvage an agreement with Iran that seeks to put to rest concerns over its nuclear program in return for sanctions relief. Foreign ministers missed a third deadline in two weeks and now have through Monday, July 13, to resolve the remaining sticking points in an accord that they say is mostly complete. Extending the talks past a July 9 cutoff means the U.S. Congress would have 60 days to review any deal instead of 30 days, delaying the lifting of sanctions. “It’s safe to say we have made progress,” U.S. Secretary of State John Kerry told reporters Friday evening. He said the latest session focused on “a couple of very difficult issues” and “the atmosphere is very constructive,” with more meetings scheduled later Friday and on Saturday. For energy-rich Iran, an agreement could speed its return to oil markets and lift financial […]

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Iranian Oil Looms for European Refiners as Nuclear Talks Stall

European refiners from Spain to Greece are ready to resume purchases of crude from Iran as talks on a nuclear deal that could allow the country’s return to oil markets remained deadlocked. Italy’s Saras SpA said it would buy Iranian crude if sanctions were to end, while Spain’s Cepsa S.A.U. said it would “definitely” consider it. Hellenic Petroleum SA said the return of Iranian barrels would be positive for refiners. “As soon as Iranian oil becomes available, we will certainly start buying again,” Loukas Tripelopoulos, a spokesman for Motor Oil Hellas SA, said by e-mail on July 3. “Motor Oil was always very fond of Iranian crude.” Italy, Spain and Greece were the top European buyers of Iranian crude until the imposition of sanctions on the Middle East nation in 2012, according to data from the International Energy Agency. Together, they imported 456,000 barrels a day in 2011, or […]

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Iran Blames U.S. for Delays on Nuclear Deal

Photo People attending demonstrations for Qds Day, or Jerusalem Day, in Tehran on Friday. Credit Newsha Tavakolian for The New York Times TEHRAN — As nuclear negotiations in Vienna grind on through deadline after deadline, Iranian officials have begun a public campaign to blame the United States in the event that the talks fail. Iran ’s public diplomacy has long been geared toward selling a possible deal to hard-liners at home. But as an interim agreement between Iran and the West was extended on Friday to give negotiators more time, the government seemed to recognize the need to prove to ordinary Iranians that it had done all it could to obtain a final agreement and the lifting of economic sanctions. “Such people may ask those in charge of the negotiations, ‘Why have you not compromised more?’ ” said Farshad Ghorbanpour, an analyst who is close to the government of […]

Posted On : Published By : Tom Whipple