Crisis
as Dubai stock market suffers biggest crash in five years - (www.telegraph.co.uk) Dubai’s
stock market plunged more than 7pc on Thursday, the worst sell-off in the
emirate since 2009, as the oil price collapse raised fears for banking and
property companies. The benchmark DFM General Index closed down 7.4pc, its
biggest one-day fall since 2009, having tumbled as much as 8.7pc earlier in the
day. Stock markets around the world tumbled as the 12-member Organisation of
Petroleum Exporting Countries yesterday cut its demand growth forecast for next
year and Saudi Arabia's oil minister said the kingdom would not cut production.
Brent Crude was trading at $64.21 per barrel on Thursday, more than 40pc lower
than the $115 peak reached in June.
Emaar properties one of the largest property
developers in the Middle East, and at almost 18pc of the DFM index the largest
single constituent, suffered a 9.1pc drop. Dubai Islamic Bank the second
largest group, which makes up 15.7pc of the index also slumped by 9.1pc in the
sell-off.
IEA
warns on social unrest as oil plummets - (www.cnbc.com) Weak
demand and oversupply in oil markets raise the risk of global social
instability and the potential for financial defaults, the International Energy
Agency (IEA) warned on Friday, as it cut its forecasts for global oil demand
growth in 2015. The report came as oil prices slid to new multi-year lows, with Brent crude hitting
a 5-½ -year low of $63.33 a barrel on Friday. "Continued price
declines would for some countries and companies make an already difficult
situation even worse," the IEA said in its new monthly report. Global oil
inventories are projected to build by around 300 million barrels in the first
half of 2015 in the absence of any disruption, the group said. It estimated
that stocks in major global economies could start to "bump" against
storage capacity limits. "The resulting downward price pressure would
raise the risk of social instability or financial difficulties if producers
found it difficult to pay back debt," it said.
Cratering oil blamed on US
supply, Saudi 'treachery' - (www.cnbc.com) New
data from the Energy Information Administration on Wednesday showed a surprise
build in U.S. oil supply for the week of Dec. 4. Crude stockpiles rose by 1.5
million barrels to 380.8 million barrels, while traders expected a drop in
supply. The bearish report also showed a sharp build in U.S. gasoline stocks of
8.2 million barrels, meaning less oil will be required for fuel. OPEC's loose
alliance to hold down production showed some fissures Wednesday, when Iranian
President Hassan Rouhani blamed falling oil prices on "treachery," in
an apparent dig at rival Saudi Arabia, according to news wires. Iranian
officials, at the cartel's meeting last month, spoke publicly in support of the
Saudi-led effort to hold production levels in the face of falling prices, even
though they had sought a production cut.
US
Oil Rig Count Tumbles Most In 2 Years - (www.zerohedge.com) We warned just a week ago that the lag between initial price
declines in oil and the closure of rigs was between 4 and 6 months and just as we warned of the deja-vu all
over again, Banker Hughes reports that the Rig Count this week dropped the
most since March 2013 (oil rigs dropped 29 to 1546 - biggest weekly drop in 2
years). The biggest drop was seen in the Permian Basin (down 20 to 548). Of
course, it's being ignored for now, just as it was in 2008... Worst weekly drop
in rig count since March 2013...
Oil
Rot Spreading in Credit - (www.bloomberg.com) Credit
investors are preparing for the worst. They’re cleaning up their portfolios,
selling riskier debtthat’s harder to trade in bad times and
hoarding longer-term government bonds that do best in souring markets. While
investors have pruned energy-related holdings in particular as oil prices
plunge, they’re also getting rid of other types of corporate bonds, causing
yields to surge to the highest in more than a year. “We believe the pervasive
nature of the sell-off is more reflective of overall liquidity concerns in the
cash market than of fundamental deterioration,” Barclays Plc (BARC) analysts Jeffrey Meli and Bradley Rogoff
wrote in a report today. “The weakness, while certainly most pronounced in the
energy sector, has been broad based.”
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