Monday, January 28, 2008
9:15 pm - Lower crude oil means lower palm oil prices ???
Oil continues lower below 90 usd mark on economic slowdown fears LONDON (Thomson Financial) - Oil prices continued to trade down below the 90 usd mark heading into the afternoon in London, as lower stock markets again sparked fears of an economic slowdown denting demand for crude. "Financial markets in Europe and Asia fell lower following comments by Goldman Sachs who said the Japanese economy has probably fallen into a recession already," said Nimit Khamar at Sucden. "The economic problems in the US and Japan will be a major concern for the oil market given that they are 2 of the 3 largest consumers of oil". At 12.48 pm, New York's WTI crude for March delivery was down 1.34 usd at 89.37 usd per barrel. In London, Brent crude for March delivery was down 1.04 usd at 89.86 usd per barrel. Prices have declined by over 10 pct since hitting an all time record high above 100 usd a barrel in the early days of the New Year. While weakness in stock markets has weighed on the demand outlook, it has also forced the liquidation of many long speculative positions in crude, as funds scramble to cover losses on falling equities. "According to the US Commodity Futures Trading Commission the speculative net long position fell by 56 pct from the week before, which is a concern for those oil bulls as hedge fund money has been a key driver to prices surging so high," said Khamar at Sucden. Oil has tracked volatile equity markets in recent weeks but some predict that the focus is soon to turn to OPEC's meeting on Friday, where the cartel is widely expected to leave production unchanged. All 27 analysts polled by Thomson Financial News expect OPEC ministers to decide against an output increase. OPEC ministers have consistently argued that oil's rally up to the 100 usd mark was fuelled more by speculators in the market rather any tightness of supply, reducing the likelihood the cartel will up production, according to Bank of Ireland analyst Paul Harris. "As the stock markets have fallen, margin calls and flight to liquidity have seen long oil positions unwound. This adds substance to the long held view by OPEC that the price appreciation has much to do with speculation rather than supply constraints. The probability is that there will be no change in production quotas." With real concerns over the state of the economic outlook still dominating moves in oil, some market watchers have started to flag the slight possibility of an OPEC production cut. "Some (OPEC ministers) are already talking about a cut, and we are sure that Venezuela and Iran will be leading the charge," said Peter Beutel, president of Cameron Hanover. "OPEC usually cuts output in March or April and global demand typically does make its low in those two months. If one throws in a risk of recession, the argument is complete". Weakness in the US dollar has seen many OPEC members become more hawkish on price, as oil revenues and currency reserves have taken a blow, analysts said. The risk to the cartel is that another spike in oil prices back towards the 100 usd mark could tip struggling economies into recession, ultimately denting demand for crude and encouraging further investment into alternative fuel sources. While prices have retreated from their record highs, they still remain at historically elevated levels. Before September of last year, prices had never closed above the 80 usd mark. d.sheppard@thomson.com ds1/ds1/jlw
9 pm - DJIA faces a resistance at 12,500
US stocks tilt lower after global selloff NEW YORK (AP) -
Wall Street looked to open lower Monday following heavy selloffs on Asian and European exchanges. The global equities selloffs were linked to concerns that there may be more massive write-downs by global banks for subprime loan losses and worries that the Federal Reserve may not cut interest rates as much as investors would like when it ends a two-day meeting on Wednesday. These problems also weigh on U.S. investors' and should pressure stocks at Monday's openings. Dow Jones industrial average futures were down 48 points, or 0.25 percent, at 12,188. Standard & Poor's 500 futures were off 7.1 points, or 0.19 percent, at 1,322.90 and Nasdaq 100 futures down 18 points, or 0.99 percent, at 1,775.5. A series of events this week, including expected references to the economy in President Bush's final state of the union address Monday evening and the Federal Reserve's interest rate announcement, are expected to influence trading. The Fed dropped rates by 0.75 percentage point last Tuesday, and another rate cut is expected this week. Hopes for a very large cut, however, have been tempered by a revelation by French bank Societe Generale last week that it sold European index futures to close a position taken by an alleged rogue trader. It is now thought that those trades may have been a substantial part of the reason that global indexes suffered massive losses one week ago when U.S. markets were closed. New data reports Monday will give clues into the state of the housing market and corporate spending levels. Sales of new homes last month are expected to decline to 625,000 from 647,000 in November, according to a poll of economists by Thomson/IFR. The Commerce Department's durable goods report for December is expected to rise by 0.5 percent, which would be up from 0.1 percent the month before, according to Thomson/IFR. Overseas markets fell Monday amid continuing economic concerns and also in response to Friday's decline on Wall Street. In Tokyo, the Nikkei stock average dropped 4 percent and in Shanghai, plunged 7.2 percent. European bourses also were largely under pressure, as London's FTSE 100 fell 2.05 percent, Frankfurt's DAX gave up 1.71 percent and Paris's CAC 40 lost 2.30 percent. In corporate news, Sears Holdings Corp. said its chief executive, Aylwin Lewis, will resign from the department store chain on Feb 2. He will be succeeded by W. Bruce Johnson, executive vice president of supply chain and operations on an interim basis. Last week, Sears said it would change its organizational structure in an effort to improve performance. Troubled mortgage lender Countrywide Financial Corp. is back in the news. Chairman and chief executive Angelo Mozilo is going to forfeit $37.5 million in pay and benefits. Mozilo was widely criticized for collecting massive pay at a time when millions of Americans may be forced into foreclosure. Copyright 2007 Associated Press. All rights reserved. This material may
10:32 am - FKLI gap down due to DJIA falling last Friday !
All of our long position is out !
FKLI is holding at this level !
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