KeNo's Housing and Economic Portal: Thursday January 8 Housing and Economic stories

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Sub-$55 Oil Has U.S. Drillers Idling Most Rigs in 2 Years - (www.bloomberg.com) U.S. oil drillers idled the most rigs since 2012 as prices slid below $55 a barrel to the lowest level in five years and a fight for market share with OPEC intensified. Rigs targeting oil declined by 37 to 1,499 in the week ended Dec. 26, the lowest since April, Baker Hughes Inc. (BHI) said on its website yesterday, extending the three-week decline to 76. Those drilling for natural gas increased by two to 340, the Houston-based field services company said. U.S. oil output has surged to the highest in three decades even as the Organization of Petroleum Exporting Countries resists cutting production to defend market share, exacerbating an oversupply that Qatar estimates at 2 million barrels a day. Crude has slumped by almost 50 percent this year, prompting U.S. producers including Continental Resources Inc. and ConocoPhillips to plan spending cuts. “We should see the rig count going down at least through the end of the first quarter as a reaction to the low oil prices,” said James Williams, an economist at WTRG Economics, an energy-research firm in London, Arkansas, before the report. “By midyear, we should see measurable impacts on production.”

IMF suspends financial aid to Greece - (www.rte.ie) IMF spokesperson Gerry Rice said discussion on the completion of the sixth review of Greece's bailout will resume once a new government is in place. Mr Rice added that the holdup in the programme would not impact the country's finances in the short term. The decision comes after Greek lawmakers failed to elect a new president in a final round of voting. It leaves the country facing an early election that could derail the international bailout programme it needs to keep paying its bills. The only candidate in the race, former European Commissioner Stavros Dimas, matched the result achieved in the second round of voting before Christmas. However, he fell short of the 180 votes needed to become president. Under Greek law, a parliamentary election must now be called, leaving financial markets and Greece's European Union partners facing weeks of uncertainty that could undermine fragile signs of economic recovery and derail its public finances.

Ukraine in ‘full-blown financial crisis' -- National Bank head - (www.rt.com) Ukraine’s GDP shrank by 7.5 percent from January till November 2014, as foreign exchange reserves fell to their lowest level since 2009, and inflation jumped to 21 percent by November, admits the head of the Ukraine’s National Bank, Valeriya Gontareva. The country’s foreign exchange reserves shrank to $9.9 billion, as Kiev gave Naftogaz an estimated $8.6 billion to buy gas and settle state guaranteed Eurobonds. $3.1 billion went to settle the debt with Russia’s Gazprom, Gontareva explained. The conflict over Russia’s reunification with Crimea has killed more than 4,700 people has also killed the economy. “There is a full-blown financial crisis,” Gontareva told reporters Tuesday. “We can only overcome it if we implement quick and even extreme reforms.”

Oil Extends Biggest Yearly Slump Since 2008 Amid Glut - (www.bloomberg.com) Oil capped the biggest annual decline since the 2008 global financial crisis as U.S. producers and the Organization of Petroleum Exporting Countries ceded no ground in their battle for market share amid a supply glut. The U.S. benchmark ended at a five-year low today, capping a 46 percent drop in 2014, as stockpiles of crude oil and gasoline reached seasonal record highs and as OPEC produced more than its quota in December for a seventh month. Goldman Sachs Group Inc. (GS) said it expects a “far lower” new normal for prices and Barclays Plc (BARC) said oil has “further downside risk.” Oil’s slump has roiled markets from the Russian ruble to the Nigerian naira and squeezed government budgets in producing nations including Venezuela and Ecuador. It’s also boosted China’s emergency crude reserves and helped shrink fuel subsidies in India and Indonesia. U.S. drivers may save as much as $75 billion at gasoline pumps next year, AAA said. Low prices have prompted producers including ConocoPhillips and Continental Resources Inc. (CLR) to plan spending cuts for 2015.

Hedge Funds Surrender to Oil Rout as Bullish Bets Drop - (www.bloomberg.com) Hedge funds finally pulled back from bets on higher oil prices as the market faced its worst year since 2008. Speculators reduced their net-long position in West Texas Intermediate crude for the first time in four weeks, cutting their holdings by 5 percent in the week ended Dec. 23, Commodity Futures Trading Commission data showed yesterday. Long wagers dropped the most since August. Prices tumbled today to the lowest level in more than five years as U.S. output climbed and the Organization of Petroleum Exporting Countries refused to make production cuts. The International Energy Agency and U.S. Energy Information Administration cut their estimates of 2015 global fuel consumption this month amid expectations for slower economic growth outside the U.S.

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