Wednesday, December 31, 2014

Five predictions for U.S. economy in 2015

Five predictions for U.S. economy in 2015

Published: Dec 31, 2014 2:33 p.m. ET

Expect 3% growth for first time since 2005 and a pickup in wages

Getty Images
The U.S. economy won’t carry as much baggage in 2015. So get ready for the fastest growth since 2005.
WASHINGTON (MarketWatch) — The U.S. economy finally got a big jolt of energy in 2014 after the lamest recovery since World War II. And 2015 is shaping up to be an even better year.
Here are five things consumers and investors can count on (probably) in 2015:
The economy will grow 3% for the first time in 10 years
The U.S. is set to add nearly 3 million jobs in 2014 — the biggest increase since 1999. The burst in job creation, expected to continue in 2015, is sure to fuel consumer spending. So, too, will a plunge in gasoline prices that’s given households extra cash to spare on other goods and services. See: Americans saved $14 billion as gasoline prices declined in 2014.
The pickup in consumption in turn will entice businesses to hire and invest more to keep up with rising sales. The result: The U.S. is likely to grow more than 3% for the first time since 2005.
Bernard Baumohl, chief global economist of the Economic Outlook Group, said he is even more optimistic. “The next two years could be the best two we have seen in at least a decade,” he said. “There is clearly a lot of evidence the economy is gaining a lot of momentum.”
Perhaps the biggest domestic threat to the 3% growth scenario would be a surprisingly swift hike in interest rates, but from all indications a dovish Federal Reserve is unlikely to take aggressive action in 2015.
Wages will finally accelerate after years of stagnation
One of the main shackles on the economy over the past four years has been stagnant wages. Hourly earnings have risen an average of 2% annually — just two-thirds of the long-term U.S. average.
Yet that’s finally about to change. With hiring up and unemployment falling, businesses will have to go the extra mile for employees or risk losing sales to competitors because they lack enough staff to boost production.
“Everywhere I go business owners are seeing an increase in demand,” said Gus Faucher, senior economist at PNC Financial Services. “Businesses will have to raise wages to attract or maintain workers.”
Businesses are already responding: Job openings in November hit the second highest level in 14 years. In another telltale sign, people are quitting jobs at the fastest rate in five years. Research shows that people who quit one job for another typically do so because they are offered higher pay.
The sharp decline in unemployment will start to seem real
The unemployment rate has plunged over the past three years to 5.8% from 8.6%, but almost nobody, including the Federal Reserve, thinks the labor market is really that heathy.
Some 18.1 million people, for example, want a good full-time job but can’t find one, an unusually high number 5 1/2 years into a recovery. And despite a sharp decline in the number of people out of work six months or longer, that figure is still higher than at any time before the 2007-09 recession.
The unemployment rate probably won’t fall quite as rapidly in 2015, according to economists, especially if more people enter the labor force because jobs are easier to find. Yet another large spate of hiring similar to the gain in 2014 would make the low unemployment rate more believable.
“By the end of next year we will be at the point where the unemployment rate is between 5% and 5.5%, and it will truly feel legitimate,” Faucher said.
Inflation (and deflation) won’t rear its ugly head
Surging oil production — along with slower global growth — has caused the price of petroleum to collapse from more than $100 a barrel last summer to barely $50 a barrel at the end of 2014. The effect has been to reverse an uptick in U.S. inflation earlier in the year.
Perhaps just as important, stable or falling prices will boost the inflation-adjusted pay of U.S. workers and gives them more bang for their buck. “It’s an unambiguous positive for household demand,” said Neil Dutta, head of economics at Renaissance Macro Research. “People will have more money to spend.”
While oil prices may rebound in 2015, they almost certainly won’t return to $100 a barrel any time soon, barring a geopolitical crisis in a major petroleum-producing region. So the gift will keep giving this year and further feed an accelerating U.S. recovery.
Faster growth should also dispel worries about another Fed bogeyman: deflation, or falling prices. “It’s impossible to have deflation in an economy growing 3%-plus and adding the most jobs since the 1990s,” Baumohl said.
The U.S. will perform well even if the rest of the world doesn’t
Slow growth around the world won’t hurt the U.S. all that much. American exports might flatten out or even dip, but that would be offset by lower imports of petroleum because of sinking oil prices. So the trade deficit is unlikely to get further out of whack.
Although foreign trade accounts for a greater share of the economy than ever, the United States is still more insulated than virtually every major competitor in Europe and Asia. Such everyday purchases as haircuts, dry cleaning, financial advice and eating out are virtually immune from foreign competition.
The upshot: The world’s largest economy can still function as an oasis in a desert despite the claims of doomsayers that those days are over.

Monday, December 22, 2014

China Offers Russia Help With Currency Swap Suggestion

China Offers Russia Help With Currency Swap Suggestion

Russian President Vladimir Putin shakes hands with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) leaders meeting on Nov. 11, 2014.
Two Chinese ministers offered support for Russia as President Vladimir Putin seeks to shore up the ruble without depleting foreign-exchange reserves.
China will provide help if needed and is confident Russia can overcome its economic difficulties, Foreign Minister Wang Yi was cited as saying in Bangkok in a Dec. 20 report by Hong Kong-based Phoenix TV. Commerce Minister Gao Hucheng said expanding a currency swap between the two nations and making increased use of yuan for bilateral trade would have the greatest impact in aiding Russia, according to the broadcaster.
While the offer won’t relieve the main sources of pressure on the ruble -- capital outflow tied to plunging oil prices and sanctions linked to Russia’s annexation of Crimea from Ukraine - - the currency gained 3.1 percent against the dollar by 12:37 p.m. in Moscow. The Micex Index was little changed, and the yield on Russia’s 10-year bond fell 30 basis points to 13.3 percent, according to data compiled by Bloomberg.
“In the current conditions, any help is very welcome,” Vladimir Miklashevsky, a strategist at Danske Bank A/S, said by e-mail. “Yet, it can’t substitute the losses of the Russian banking system and economy from western sanctions.”
Photographer: Greg Baker/AFP via Getty Images
Russian President Vladimir Putin shakes hands with Chinese President Xi Jinping at the... Read More

Strategic Importance

Russia, the biggest energy exporter, saw its currency tumble as much as 59 percent this year. Putin asked business leaders last week to report on plans to sell foreign currency revenues and to engage in responsible foreign exchange operations, Vedomosti newspaper reported today. Former Economy Minister Alexei Kudrin said Russia was entering a full-fledged economic crisis.
A Chinese Commerce Ministry news official, who asked not to be named as part of the rules, said his department declined to comment on the Phoenix TV report, and a faxed question to the Chinese central bank went unanswered. President Xi Jinping last month called for China to adopt “big-country diplomacy” as he laid out goals for elevating his nation’s status as the world’s second-largest economy.
“Many Chinese people still view Russia as the big brother, and the two countries are strategically important to each other,” said Jin Canrong, Associate Dean of the School of International Studies at Renmin University in Beijing, referring to the Soviet Union’s backing of Communist China in its first years. “For the sake of national interests, China should deepen cooperation with Russia when such cooperation is in need.”
Photographer: Greg Baker/AFP via Getty Images
Russian President Vladimir Putin shakes hands with Chinese President Xi Jinping at the... Read More

Swap Line

China and Russia signed a three-year currency-swap line of 150 billion yuan ($24 billion) in October, an agreement that can be expanded with the consent of both parties. The People’s Bank of China published a chart detailing how such an agreement works in a microblog dated Dec. 19 and the official People’s Daily newspaper said today that the explanation was provided to address concerns the nation could suffer losses if Russia used the facility to obtain funds.
“As all we pay out and receive in return are renminbi, we don’t have to bear exchange-rate risks,” the PBOC said in the microblog, using an alternative name for the yuan. The swap amount can be adjusted to allow for changing circumstances and prevailing exchange rates, rather than pre-determined, are used, it said.
China is promoting the yuan as an alternative to the dollar for global trade and finance and the PBOC has signed currency-swap agreements with 28 other central banks to encourage this. The nation’s foreign-exchange reserves of $3.89 trillion are the world’s largest and compare with Russia’s $374 billion.

“Irreplaceable Partner”

“Russia is an irreplaceable strategic partner on the international stage,” according to an editorial today in the Global Times, a Beijing-based daily affiliated with the Communist Party. “China must take a proactive attitude in helping Russia walk out of the current crisis.”
Still, “China’s help for Russia will be limited,” the editorial said. While China can offer capital, technical and market support, it can’t address Russia’s economic structure and excessive reliance on energy exports, the editorial said.
China signed a three-decade, $400 billion deal to buy Russian gas earlier this year. Oil imports from Russia hit an all-time high in November, according to China’s General Administration of Customs.
Russia isn’t in talks with China about any financial aid, said Dmitry Peskov, a spokesman for President Putin, on Dec. 20.


Russia wouldn’t be the first country in financial strife to turn to China for support this year. Argentina’s central bank utilized a cross-currency swap with the PBOC to stem a slide in the peso, which dropped 24 percent against the greenback this year as the government defaulted on dollar bonds. The peso has weakened 0.3 percent this month following a similar decline in November.
A similar move by Russia could help stabilize the ruble, according to Jan Dehn, the London-based head of research at Ashmore Group Plc, which manages about $70 billion in emerging-market assets. It would also bolster Chinese efforts to make the yuan a global reserve currency, he wrote in a Dec. 18 report.
To contact Bloomberg News staff for this story: Fion Li in Hong Kong at; Xin Zhou in Beijing at; Anna Andrianova in Moscow at
To contact the editors responsible for this story: James Regan at Michael Winfrey, Scott Rose

Friday, December 19, 2014

沙特死磕油价暴跌 俄罗斯发愁美国也发愁(图)

沙特死磕油价暴跌 俄罗斯发愁美国也发愁(图)

文章来源: - 新闻取自各大新闻媒体,新闻内容并不代表本网立场!
打印本新闻 (被阅读 35587 次)



截至12月14日, 北海布伦特原油价格报收61.85美元/桶。仅仅在半年以前,油价还在110美元以上的高位上。短时间内的如此剧烈变动,其成因十分复杂,后果也是多方面 的。首先俄罗斯就中枪了。如今的俄罗斯经济高度依赖能源出口,石油价格的波动对俄国经济有显著的影响。事实上,俄联邦预算就是在油价预期的基础上制作的。 近几年普京实施强硬的对外政策,国防开支大增,根据布隆伯格(Bloomberg)的计算,2014年,只有当油价稳定在114美元的水平时,才能做到财 政收支平衡。目前的油价下,俄国的压力可想而知。事实上,苏联的解体就与八十年代的石油价格暴跌有关,这次历史仿佛有些似曾相识。另外中枪受伤严重的还有 伊朗和委内瑞拉。根据英国《经济学人》的计算,伊朗需要油价维持在136美元才能保证财政收支平衡;而根据德意志银行(Deutsche Bank)的计算,委内瑞拉由于政府的一系列民粹主义政策,经济本身不发达,财政困难,需要油价维持在120美元才能保证财政收支平衡。加之通胀率高达 60%,2013年债务占GDP比重17%,如今的低油价无疑是雪上加霜。

这几位都是和美国不对付的主,现在他们的日子不好过了,美国应该高兴才对。况且,美国是世界上最大的石油进口国和消费国,同时也是一个发达工业国。油价下 降既能降低其经济运行成本,而且还能起到稳定通胀率的作用。但是在这个价格上,它也高兴不起来。根据高盛(Goldman Sacks)的估计,美国页岩油行业的盈亏平衡点在85美元一桶左右。而事实上,美国页岩油企业大部分为中小企业,长期面临现金流赤字等问题。所以,根据 英国咨询机构伍德-麦肯锡(Wood Mackenzie)的估计,他们需要油价维持到100美元左右才能在2-3年内实现收支平衡,如果降到90美元,那么将有60%的企业入不敷出。85美 元俨然就是生死线,那么如今的70美元算是地狱了。

更糟的是,这不单单是页岩油一个行业的问题。要知道,页岩气和页岩油可是美国所谓“再工业化”的三块基石之一(另两块为3D打印和制造业自动化),所以页 岩气和页岩油产业的革命近年来是美国媒体热炒的对象。其意义就在于,如果,美国的页岩油和页岩气的储量和产量能够达到预期,那么根据国际能源署(IEA) 的预期,美国将在2018年前后达成能源独立,甚至成为油气净出口国。如此不但会进一步降低美国工业的能源成本,还能通过出口带来巨大的收益,对于工业的 再发展的确十分有利。可是这个规划现在面临严重考验。目前的价格对页岩油很不利,以布隆伯格(Bloomberg)的说法,页岩油产业已经进入熊市。如果 油价真的如预期在未来的一年内维持在80美元以下,页岩油企业的大规模倒闭就是可以预期的,毕竟,根据英国巴克莱银行(Barclays Bank)的计算,使用目前的技术,五分之四的页岩油需要价格在85美元左右才能维持其开采的经济性。那么这次能源革命很可能被扼杀在摇篮中,美国的“再 工业化”也会缺失掉一个基础。

另一个更加紧迫的问题是,这些油气企业的融资是来源于金融业的。如果他们出现问题,就会成为银行的坏账和其他金融机构的垃圾资产。根据美国惠誉评级 (Fitch Ratings)的数据,美国能源企业发行的评级低于B-的高收益债卷,也就是垃圾债,的规模已经达到750亿美元。这些垃圾债是谁在持有?会有什么后 果?回想一下次贷危机是怎么来的吧。这750亿美元的垃圾债券,就是金融机构手中的毒瘤,而且随着油价走低还会不断扩大。一旦毒性爆发,不仅是页岩油气企 业会破产,金融业会因为收不回贷款而蒙受巨额损失。而且损害还会被金融杠杆放大,到时候会有很多人日子不好过。

所以美国人也开始担心起来。问题是,究竟是谁敢在老大哥头上动土?当然了,阴谋论是不能用来解释油价的。况且,在当今的世界上,石油价格也不是一家就能说 了算。原油是个商品,油价是服从价值规律的。价格下降,必然有供需关系出现问题这一因素。首先在需求上,中美两个石油消费大户都下调了需求。而欧洲一方面 需要降低碳排放,另一方面需要降低对俄国能源的依赖,也想减少对化石燃料的使用。供给上,一方面,美国的页岩油上马项目太多、太快,产能过大,拉低了油 价。根据美国能源署(EIA)的数据,2008年到2014年,美国页岩油产量增长了3.5倍,达到每日450万桶,已经能对油价产生显著影响。今年八月 份,伦敦《金融时报》撰文指出新技术的应用让投资者和分析师们对未来的产出表示乐观。虽然那个时候油价已经开始走低。而美国政府即使看到危险将近,也不好 管制。一方面这有违于自己一直标榜的经济自由主义;另一方面,参议院和白宫被不同政党把持,而且扯皮不断,此时中央政府很难制定并且推行切实有效的管制手 段。况且,页岩油产业是金融危机后,在数论量化宽松(QE)少数获益的实体经济部门,又是“再工业化”的基础之一。奥巴马自己提出的“再工业化”,此时也 不好限制页岩油产业的发展。至于企业自己,也不会主动停产减产,因为这样就得不到融资了。美国页岩油产业就如同一台失控的列车,横冲直撞,但是没人知道怎 样去停止它。

另一方面,这个世界最大供应者石油输出国组织(OPEC)拒绝限价,释放产能。组织在11月27日已经明确表示不减产,同时还表示没有明确的价格目标。其 限价谈判破裂,就是直接诱因。英国《经济学人》就报道,沙特希望通过释放产能,压低油价,来打击竞争对手,因为毕竟自己实习相对雄厚,去年的财政盈余多达 549亿美元,能够忍受长时间低油价带来的损失。几个主要竞争对手,俄罗斯,美国如火如荼发展的页岩油产业,同时还有在伊斯兰世界内不同派系的什叶派伊朗 都受到打击。美国一个产业受损,算是肌腠之患,而俄国和伊朗这两位皆需要油价维持110美元以上来维持财政收支平衡的就是内伤了。不过对于沙特美国也没有 什么好办法。虽然美国的利益受到损害,但是奥巴马已经成为跛脚总统,国内政治撕裂严重,至少不会在短期拿出什么措施也约束沙特。

貌似这一切都不关中国的事,我国目前是喝茶围观,闷声发财。中国是世界上最大的工业国,而石油仍然是重要的工业能源,事实上我国正是世界第二的石油进口和 消费国。根据国际能源署的统计,在中国的初次能源供应结构中,石油占16.1%。石油价格下降有利于降低我国工业运行成本,算是一个利好。根据英国《经济 学人》的计算,油价每下跌一美元,中国一年既可以节省21亿美元的能源成本。不可谓不多。而国际贸易的成本也会下降。而在去年,我国的货物贸易总量就超过 了美国,成为第一,所以这对我国又是一个利好。事实上目前的低油价已经为我国节省了600亿美元的进口费用。同时还有稳定物价水平,增加对煤炭的替代,同 时减少空气污染等多重好处。同是,像委内瑞拉、伊朗和俄国这些利益严重受损,而又传统上和西方有矛盾的国家,此时可能会选择进一步向我国靠拢,对我国也是 有利的。不过问题也是要辩证看待的。根据商务部的报告,今年1到6月,美国与中国双边货物进出口额为2725.5亿美元。也就是说,中美的贸易联系是十分 紧密的,数额是十分巨大的。如果真如上文所说,美国经济出现大的问题,中国也势必受到波及。而调整经济结构,减少对美国的依赖就是办法。地缘政治上来讲, 如果美国国内经济出现问题,那么对亚太的控制就会减弱,其间各种不确定性也会增加,我国要做好防范准备。

Tuesday, December 16, 2014

油价跌至55美元 中国替代美国成最大买家(图)

油价跌至55美元 中国替代美国成最大买家(图)

京港台:2014-12-17 00:13| 来源:中新网 | 评论( 2 )  | 我来说几句

油价跌至55美元 中国替代美国成最大买家(图)

来源:倍可亲( 国际原油价格15日继续暴跌。纽约原油期货价格五年来首次冲击每桶55美元重要关口。随着国际原油价格一路下滑,汽车司机无疑是最大的受益者。目前,全美已有13个州油价跌破了每加仑2美元        
   美国《华尔街日报》16日报道称,近来全球原油价格从每桶100美元上方骤然跌至65美元以下,一些人将此形容为全球两大产油国——沙特和美国相互对抗 所造成的结果。然而实际情况要更加复杂,这其中涉及到利比亚的反对派武装、印尼的出租车司机、美国德克萨斯州的石油工人乃至中东各国的油长。这既反映出了 原油供应的大幅增加,也折射出原油需求的下滑。
  此次油价下跌的根源要回溯到2008年德克萨斯州科图拉附近的一个小镇,在安东尼奥和墨西哥边境之间。鹰福特(Eagle Ford)页岩区的第一口井就在这里。当时美国原油日产量大约为470万桶。
   2009和2010年,全球经济复苏,石油需求增加,原油价格上涨,为发现新的供应提供了动力。在科图拉和其他地区,美国探商响应了这一趋势。如今,德 克萨斯州南部分布着200多个井平台,在地面下的岩石中勘探。一旦经过勘探和液压断裂处理,这些矿井将出产大量优质石油。目前,美国的原油日产量为890 万桶,得益于鹰福特和其他新开采油井的贡献。
  美国并没有增加汽油产量,否则他们将耗尽所有新增原油。而且根据20世纪70年代制定的美 国法律,出口原油几乎是不可能的。因此,美国炼油企业从德克萨斯州和北达科他州采购低价的优质原油,来取代尼日利亚、阿尔及利亚、安哥拉和巴西的原油,以 及除加拿大以外的其他所有石油生产国的原油。
   接着,两大事件改变了原油市场的走势。6月底,《华尔街日报》的报道称,美国政府近40年来首次批准出口美国原油。虽然被允许出口的油品有限,但市场认 为这标志着美国首次打破了长期的原油出口禁令。美国不仅减少了原油进口量,还可能很快开始出口一定量的原油。这一消息搅动了原油市场,油价开始从夏季高点 回落。
  纽约追踪全球原油市场动态的公司ClipperData的首席营运长蔡恩(Abudi Zein)表示,沙特也已经感觉到了这种竞争。他说,以往主要将石油出口到美国的哥伦比亚今年发现其最大的买家是中国,而中国是欧佩克的一个重要市场。

Tuesday, December 9, 2014

Crude Rises Amid Speculation Over U.S. Shale-Oil Supply Growth

Crude Rises Amid Speculation Over U.S. Shale-Oil Supply Growth

Dec. 9 (Bloomberg) – Marketfield Asset Management CEO Michael Shaoul examines falling oil prices and the impact on global markets. He speaks with Bloomberg’s Tom Keene, Scarlet Fu and Brendan Greeley on “Bloomberg Surveillance.” (Source: Bloomberg)
Brent rose for the first time in six days amid speculation about the price level that will force some producers to curb investment and limit future supply growth. West Texas Intermediate advanced in New York.
Brent futures rose as much as 1.1 percent in London, reversing an earlier loss of 1.4 percent. U.S. shale oil production will continue to grow, according to Citigroup Inc., while consultant Energy Aspects said the expansion may slow next year. Price competition intensified in the Organization of Petroleum Exporting Countries after Iraq, the group’s second-largest producer, reduced its Basrah Light crude price for January to the lowest in at least 11 years.
Crude is trading in a bear market as the highest U.S. production in three decades exacerbates a global glut. Saudi Arabia, which led OPEC’s decision to maintain rather than cut output at a Nov. 27 meeting, last week offered supplies to its Asian customers at the deepest discount in at least 14 years.
“After yesterday’s solid fall, it’s no surprise that oil is taking a small breather,” Bjarne Schieldrop, chief commodities analyst at Oslo-based SEB, said by e-mail. “The market will remain volatile until it finds the Goldilocks price that dampens U.S. shale oil supply growth, stimulates the global economy and still lets OPEC members survive.”
Brent for January settlement climbed as much as 74 cents to $66.93 a barrel on the London-based ICE Futures Europe exchange before trading at $66.47 at 1:41 p.m. local time. It slid $2.88 to $66.19 yesterday, the lowest close since September 2009. The European benchmark crude traded at a premium of $2.95 to WTI. Prices are down 40 percent this year.

Shale Production

WTI for January delivery increased 52 cents, or 0.8 percent, to $63.57 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $2.79 to $63.05 yesterday, the lowest close since July 2009. Total volume was about 35 percent above the 100-day average for the time of day.
The U.S. oil boom, driven by a combination of horizontal drilling and hydraulic fracturing, has unlocked supplies from shale formations including the Eagle Ford in Texas and the Bakken in North Dakota. Production increased to 9.08 million barrels a day through Nov. 28, the fastest rate in weekly records that started in January 1983, data from the Energy Information Administration showed.

Decline Rate

U.S. growth is at risk of slowing in the second half of next year and in 2016, Amrita Sen, chief oil market analyst at consultant Energy Aspects, said at a Platts conference in Dubai. Market fundamentals don’t warrant a price as low as $60 a barrel and WTI will average in the “high sixties” in the first half of next year, with Brent in the “low seventies,” she said.
Shale production will keep growing because the rate of decline from wells has been overstated, Ed Morse, head of commodities research at Citigroup Inc., said at the same conference.
ConocoPhillips plans capital expenditure of $13.5 billion in 2015, down about 20 percent from this year, according to a statement yesterday. The reduction primarily reflects lower spending on major projects, several of which are nearing completion, as well as deferral of spending on some North American shale plays, it said.

Mideast Competition

“The Iraqi cut is just an indication of the ongoing ‘price war’,” Eugen Weinberg, head of commodities research at Frankfurt-based Commerzbank AG, said by e-mail. “OPEC is currently thinking more in terms of market share and doesn’t care so much about pricing.”
Iraq’s Oil Marketing Co. will sell Basrah Light to Asia at $4 a barrel below the average of Middle East benchmark Oman and Dubai grades, the steepest discount since Bloomberg started compiling the data in August 2003. The company reduced prices to U.S. buyers by 30 cents and marked up shipments to Europe by 10 cents, the list obtained by Bloomberg News showed.
Middle East producers including Iraq, Iran and Kuwait typically follow Saudi Arabia’s lead when setting crude export prices. The kingdom is the biggest member of OPEC, which supplies about 40 percent of the world’s crude.
Saudi Aramco, the state-run oil company, lowered the official selling price for Arab Light to Asia next month to $2 a barrel less than the average of Oman and Dubai, the company said by e-mail Dec. 4. That was $1.90 wider than December and the biggest discount in data compiled by Bloomberg since June 2000.
“Oil prices will stay around the current level of $65 for six or seven months until OPEC changes its production policy, or recovery in world economic growth becomes more clear, or geopolitical tension arises,” Nizar Al-Adsani, Kuwait Petroleum’s chief executive officer, said yesterday. The nation is the third-largest of OPEC’s 12 members.
To contact the reporter on this story: Jake Rudnitsky in Moscow at
To contact the editors responsible for this story: Alaric Nightingale at James Herron

Monday, December 8, 2014

Brent oil futures crash to lowest since October 2009

Brent oil futures crash to lowest since October 2009

CommoditiesDec 08, 2014 02:22PM GMT Add a Comment
© Reuters.  Brent oil futures extend sell-off to hit lowest since October 2009 © Reuters. Brent oil futures extend sell-off to hit lowest since October 2009 - Brent oil futures tumbled to the lowest level since 2009 on Monday, as concerns over the global economic outlook and the impact on future oil demand prospects continued to dampen the appeal of the commodity.

On the ICE Futures Exchange in London, Brent oil for January delivery fell by as much as 3.28% to touch a session low of $66.80 a barrel, the weakest level since October 2009, before trading at $67.19 during U.S. morning hours, down $1.89, or 2.73%.

On Friday, London-traded Brent prices lost 57 cents, or 0.82%, to settle at $69.07 a barrel.

Data released earlier showed that China’s exports climbed 4.7% from a year earlier in November, missing expectations for a 7.9% increase, while imports fell 6.7%, compared to forecasts for a gain of 3.5%.

The country's trade surplus widened to $54.5 billion last month from $45.4 billion in October, compared to estimates for a surplus of $43.2 billion.

Separately, revised data showed that Japan's economy shrank by an annualized 1.9% in the third quarter, more than the preliminary estimate of a 1.6% decline.

On a quarter-over-quarter basis the economy contracted by 0.5% in the three months to September, compared to a preliminary estimate of a 0.4% contraction.

Wall Street investment bank Morgan Stanley cut its price forecast for Brent crude to $70 from $98 and for 2016 to $88 from $102.

"Without OPEC intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015," the bank said in a report on Monday.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in January dropped $1.38, or 2.09%, to trade at $64.47 a barrel, after hitting a daily low of 64.11.

Nymex oil futures declined 97 cents, or 1.45%, on Friday to end at $65.84 a barrel. Prices hit $63.72 on December 1, a level not seen since July 2009.

The US dollar index, which measures the greenback against a basket of six major currencies, traded near the strongest level since March 2009, as upbeat U.S. employment data added to expectations that the Federal Reserve could raise interests sooner and faster than previously expected.

Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.

London-traded Brent prices have fallen nearly 42% since June, when it climbed near $116, while WTI futures are down almost 40% from a recent peak of $107.50 in June.

Saudi Arabia’s state-run oil company lowered official selling prices for its crude in January last week to the lowest in at least 14 years for buyers in the U.S. and Asia.

The move suggested that the kingdom is stepping up a battle for market share with cheaper U.S. shale oil after last week's OPEC decision to keep production quotas unchanged.

The Organization of Petroleum Exporting Countries said on November 27 that it would maintain its output target at 30 million barrels a day, disappointing hopes the oil cartel would lower production to support the market, as a surplus develops amid the shale boom in the U.S., which is pumping at the fastest pace in more than 30 years.

Tuesday, November 25, 2014

The 51% Chinese web stock crash that analysts never saw coming

The 51% Chinese web stock crash that analysts never saw coming Add to ...

Click Here
Analysts had high expectations for Sina Corp. last year, forecasting a 19 per cent stock rally in the Chinese Web portal operator.
It hasn’t quite worked out that way.
Sina plunged 51 per cent $38.32 in the 12 months through Monday, creating a 70 percentage-point gap between forecast and performance. That’s the biggest buy-rating blunder by analysts covering the 55 largest Chinese companies traded in New York.


The stock sank to a four-year low last week after Sina’s portal advertising business, which accounts for half its revenue, turned unprofitable this year amid a user shift to other platforms. While analysts had in part been drawn to Sina because of its controlling stake in the microblogging site Weibo Corp., that stock has slumped 24 per cent since Sept. 11 as rival platform WeChat grew and the government stepped up control over social media.
“People were too enamored of the power and upside of Weibo,” David Riedel, president of Riedel Equity Research in New York, said by e-mail yesterday. The company “will have difficulty monetizing, will always have the concern over government censorship hanging over them and will have slowing growth, all bad for stock price performance.”
Riedel was one of three analysts who had sell ratings on Sina last November, when 25 recommended buying and four advised investors to hold the shares. His price target was $55.94 when the stock was trading above $70, while his current recommendation is hold with a price estimate of $45.
Quarterly Losses
Analysts at Brean Capital LLC and Jefferies Group LLC were the most optimistic a year ago, setting 12-month price targets of $120 and $107, respectively. While their bullish calls on Sina were wrong, investors who followed the analysts’ recommendations to buy Baidu Inc. would have made money. The operator of China’s biggest search engine has gained 54 per cent in the past 12 months.
Brean Capital analyst Fawne Jiang didn’t respond to an e-mailed request for comment on her Sina recommendation. Cynthia Meng at Jefferies pointed out that she changed her rating to hold from buy in January, citing increased competition and tighter government oversight.
Sina, which has a market value of $2.6-billion, fell 0.1 per cent to $38.30 at 11:51 a.m. in New York. Analysts 12 months ago forecast that shares would be selling for $92.31. It’s the biggest negative surprise in that time period among the most– actively traded Chinese companies in the U.S. with a market value above $1-billion, according to data compiled by Bloomberg.
E-Commerce Focus
Shanghai-based Sina said this month that it lost $10.9-million on operations in the period July through September as expenses jumped 43 per cent. It was the third straight quarterly loss. Revenue growth of 8 per cent was the slowest in almost two years amid a shift in usage from the website to other platforms such as mobile.
“On the portal side, we’re facing challenges as more marketing dollars from brand advertisers have been shifted to video, vertical sites and mobile,” Sina’s Chief Executive Officer Charles Chao said in a call with analysts on Nov. 13.
Cathy Peng, Sina’s Beijing-based head of investor relations, didn’t respond to an e-mail seeking comment on the stock performance.
Investor attention is shifting to Chinese Internet retailers such as Alibaba Group Holding Ltd., which has rallied 68 per cent since its September debut in New York, because portal websites like Sina and Inc. are declining in popularity, according to Eric Jackson, the founder of Ironfire Capital LLC.
“It’s hard to get excited about user growth in these businesses compared with e-commerce companies like Alibaba,” he said in a phone interview on Nov. 17.
Weibo Stake
While analysts were overly optimistic about Sina last year, the drop in its shares may have been excessive, according to Chiheng Tan, a Boston-based analyst at Granite Point Capital Inc., which invests in U.S.-listed Chinese Internet companies.
“If you add up Sina’s ownership of Weibo, Leju, Tian Ge, and its cash balance, the number should be bigger than its current market value,” Tan said in e-mailed comments on Nov. 19.
Sina’s retreat over the past year compares with a 2.8 per cent advance in the Bloomberg China-US Equity Index. The company holds stakes in Tian Ge Interactive Holdings Ltd., a social video platform, and home-listing website Leju Holdings Ltd. besides owning about 54 per cent of Weibo.
Analysts had estimated the value of Weibo would be $5.1-billion before its April IPO. It’s now valued at about $3.7-billion. China’s has stepped up efforts to rein in online defamation, with the nation’s top court saying last year that Web users could face jail time for defamatory rumors.
WeChat Competition
Weibo had 167 million monthly active users in September, compared with 468 million on WeChat, the mobile messaging application owned by Tencent Holdings Ltd., China’s second– largest Internet company.
“A lot of people have noticed the change of interest from Weibo to WeChat,” said Jackson, who sold his holdings in Sina before the Weibo spinoff. “They are not interested in putting advertising into Weibo, because it is less popular now.”