Oil prices remain under pressure

Oil prices remained under pressure due to the weak demand, although small increases reported on Tuesday.

Persistent global production has contributed to the near-record levels of oil being pumped and a lessening of demand will hurt prices further.

Futures for WTI crude gained 0.19% to $36.88 per barrel. While Brent contracts advanced 0.11% to trade at $36.66.

While the fallout of increased production has resulted in lower prices, demand has so far kept up and even outstripped the supply.

However, that appears to be under threat as JBC Energy reports demand growth in Europe turned negative for the first time in ten months in October.

This represents a loss of 170,000 barrels per day (bpd) year-on-year while the report also highlighted the slowing demand from China as it continues to transition to the 'new normal'.

Some analysts are predicting that output will exceed demand by more than 2 million bpd, and with OPEC refusing to curb production the pressure is mounting.

As many as 64% of rigs in the US have closed this year, according to data from oilfield services company Baker Hughes, but a meaningful decline in output has yet to materialize, with the remaining producers being able to drill more efficiently.

The supply glut is unlikely to be alleviated anytime soon as Iran announced they will increase exports by 500,000 bpd within weeks of Western sanctions being lifted.

Iran has the fourth largest reserves of oil in the world and fears of a return to pre-sanction output of 2.5 million bpd could put further pressure on the fragile petroleum price.

Meanwhile, Monday's Saudi Arabian budget implied that the price war with US shale is taking its toll on the economy in the kingdom, with the government planning to spend 135 billion riyals less in 2016.

The ministry of finance was prompted to give such austere projections based on the persistent and stubbornly low oil prices. This has led them to giving reduced revenue expectations while also cutting spending.

Audi shrinks its spending plans for 2016

Volkswagen's flagship Audi plans to shrink significantly its speding plans for 2016 and plans to postpone the construction of a new wind tunnel, after Volkswagen concern suffered from a scandal over rigged emissions test.

Audi, which made a higher operating profit than the VW group in the first nine months of 2015, said it would invest more than 3 billion euros ($3.3 billion) on plants and equipment in 2016.

A company source said the plan foresaw spending of 3.3 billion euros for next year. Under its previous budget drawn up a year ago, Audi announced investments of 17 billion euros over 2015-19, or an annual average of 3.4 billion euros.

"With the current investment program, we obviously want to enhance the brand’s strong position, but at the same time, we aim to achieve additional financial scope by means of further process and cost optimization," Audi finance chief Axel Strotbek said in a statement.

The move comes after VW, Europe's biggest automotive group, cut 1 billion euros from its 2016 investment plan in November, as its emissions cheating scandal expanded to include tens of thousands more U.S. vehicles.

Audi vowed not to save at the expense of future growth but rather to examine every investment decision individually.

"The Board of Management has therefore decided to postpone the construction of a new wind tunnel for one year," it said.

The company did not comment on investment plans beyond 2016.

Merry Christmas!

Dear friends,

Christmas usually brings family and friends together.

Christmas helps us appreciate the love in our lives we can often take for granted.

May the true meaning of the holiday season fill your heart and home with many blessings!

May this holiday season sparkle and shine!

May all of your wishes and dreams come true, and may you feel this happiness all year round.

Wish you a Merry Christmas!

Mixed trading on Wall Street today

Trading on US exchanges today showed mixed results after continuing recovery of oil prices considering that the past three days the US indices recorded gains.

Stocks close at 1 p.m. ET on Thursday and are closed for the Christmas holiday on Friday. Other markets including energy and bonds will also close early, shutting at 1:30 p.m. ET and 2 p.m., ET, respectively.

Treasury yields held little changed, with the 2-year yield at 0.99 percent and the 10-year yield near 2.26 percent.

The U.S. dollar index was about 0.3 percent lower against major world currencies, with the euro near $1.095 and the yen at 120.42 yen against the greenback as of 8:35 a.m., ET.

Oil will be in focus, after a bounce in crude prices helped propel U.S. stocks to closer sharply higher on Wednesday, with the Dow Jones ending up triple digits. Natural gas inventories are due later in the morning. 

U.S. crude prices rose for a fourth straight session on Thursday, headed for a 9 percent weekly gain in the lead-up to Christmas, as the market tightened on the back of falling supplies and exports.

Front-month West Texas Interemediate (WTI) crude futures trading at around $37.70 per barrel early on Thursday, set for the biggest weekly gain since early October. Internationally traded Brent futures trading at around $37.60 a barrel, as U.S. crude defended the small premium it regained this week for the first time in around a year.

Despite wild volatility this year, the U.S. benchmark S&P is barely positive for the year and it's uncertain whether stocks will finish 2015 in the green.

As of Wednesday's close, the S&P 500 is up 0.26 percent for the year so far, while the Nasdaq composite has posted a year-to-date gain of 6.5 percent. The Dow Jones industrial average remains more than 1 percent lower for 2015.

After Thursday's half-daysession, there will be just five more trading days left this year and accordingto analysts, stocks are typically higher on those five days, as well as duringthe first two of January.

European markets ended with strong gains after rising oil prices

European markets accelerated gains before the upcoming Christmas holidays and closed with strong gains as investors welcomed the recovery of oil prices and shares of mining companies.

The pan-European STOXX 600 finished 2.7 percent higherprovisionally, with all sectors closing sharply higher, helped by a positive trading session in the U.S.

Oil was in focus after U.S. crude prices rose above Brent on Wednesday, following an unexpectedly large drop in U.S. crude inventories.The Energy Information Administration reported crude inventories fell by 5.9 million barrels last week, which shocked markets as analysts had expected an increase of 1.1 million barrels. 

At the European market close, U.S. crude and Brent both traded at over $37 per barrel, up more than 3 percent on the day.

The European oil and gas stock index closed up around 4.8 percent as a result.

Shell and BG shares were also pushed higher by support from shareholder Aberdeen Asset Management for Shell's proposed $53 billion takeover of BG.

Shell released a statement saying the break-even price for the deal was somewhere in the low $60 range for Brent crude oil.

BG Group and Shell's shares both finished more than 5 percent higher on Wednesday.

Tullow Oil was one of the top performers on the STOXX 600, finishing over 10 percent up, with Seadrill and Statoil also posting strong gains, closing up 4.7 and 5.2 percent respectively.

Base metal prices ticked slightly higher on Wednesday, boosting mining stocks. Steel maker Arcelormittal finished over 11 percent higher, with major miners including Anglo American and Glencore, closing up over 8 percent.

This helped propel London's mining-heavy FTSE 100 index, which ended 2.6 percent higher.

Syngenta shares closed 2.5 percent up after the Swiss agrochemicals group said it was in talks with Monsanto, ChemChina and other companies but has not yet received a concrete takeover offer.

French pharmaceutical firm Sanofi finished around 2.8 percent higher after it said it had submitted an application to the U.S. Food and Drug Administration for a new diabetes drug.

Shares in Games Digital tanked almost 38 percent, after the British video games retailer said in a trading update that it expected first half profits to fall due to the U.K.'s "challenging" market conditions and disappointing sales.

US economy grew by 2% in the third quarter

The gross domestic product of the USA increased by 2% in the third quarter, according to the third estimate, that was released today by BEA.
The result was below initial estimates for growth of 2.1%, but exceeded the forecasts of analysts, who expected more serious correction to 1.9%.
The change of the data is influenced mainly by the trade deficit, which was above previous estimates and the stockpiling recorded a slight increase according to the reported earlier.
Exports increased by 0.7% instead of 0.9% while imports rose 2.3% instead of 2.1%. The increase of stockpiling was revised from $ 90.2 billion to $ 85.5 billion.
However, home construction is represented more strongly than previous calculations, with recovery of 8.2 percent instead of 7.3 percent.
The growth of domestic consumption remains at 3% and business investment recorded an increase of 2.6% for previous estimates of 2.4%.
For the first nine months of 2015, the US economy registered expansion of 2.2%, and probably continued at the same pace in the last months of the year.

Oil prices recovered in anticipation of stockpiles data in US

Oil prices recovered on Tuesday, as main oil benchmarks WTI and Brent traded in the green area in anticipation of serial data on US reserves.

US crude oil recovered on Tuesday from Monday's steep losses, with Brent trading near its lowest level since mid -2004 on a worsening supply glut.
Futures for WTI rose 0.28% to trade at $35.91 per barrel, while Brent futures dropped 0.33% to $36.23 per barrel.
The current global surplus of oil is the major threat for oil prices that had been falling since the summer last year, with some analysts predicting the commodity has not yet reached its bottom.Investment bank
Goldman Sachs sees oil at $20 per barrel next year, while some investors say the price may go even lower.
Oil production in the US is expected to fall from the current about 9.1 million barrels a day (bpd) to around 8.6 million bpd by mid-2016.
"While the oil market is expected to remain in surplus through 2016, the rate of stock builds is expected to slow, and there is enough onshore storage to contain it," analysts at Barclays stated.
The fresh weekly stockpiles data by the American Petroleum Institute will be released later on Tuesday,while the official government data are due to be published on Wednesday.
Last week, crude stockpiles in the US jumped by 4.801 million barrels to hit 491 million barrels, an almost record high, even as the market had forecast a fall of about 500,000 barrels. For the week ending December 18,analysts predict a rise of about 1 million barrels.