Crude Oil Declines as Global Glut Outweighs Middle East Tensions

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Oil fell, erasing an earlier gain, as a global glut outweighed an increase in tension between Saudi Arabia and Iran.

The Saudi government cut ties with Iran following an attack on its embassy in Tehran by demonstrators protesting the execution of a prominent Shiite cleric. Prices last week capped the biggest two-year loss on record amid speculation a global glut will be prolonged as U.S. crude stockpiles expanded and the Organization of Petroleum Exporting Countries abandoned output limits.

The Middle East accounted for about 30 percent of global oil output in 2014, according to the U.S. Energy Information Administration. Iran and Saudi Arabia sit on either side of the Persian Gulf, the site of the world’s biggest concentration of oil tankers.

West Texas Intermediate for February delivery fell 26 cents, or 0.7 percent, to $36.78 a barrel at 1:52 p.m. on the New York Mercantile Exchange. Brent for February settlement slipped 9 cents to $37.19 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of 41 cents to WTI.

Crude inventories at Cushing, Oklahoma, the delivery point for WTI futures, rose to 63 million barrels in the week ended Dec. 25, a record high, according to the Energy Information Administration. Domestic production climbed for a third week to 9.2 million barrels a day.

Source: Bloomberg

Gold Rises Most in Two Weeks on Equities Drop, Mideast Tensions

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Gold had the biggest gain in two weeks as plunging global equities and mounting tensions in the Middle East spurred a return to haven assets.

Emerging markets equities slid the most since August and the Dow Jones Industrial Average sank more than 300 points, as slowing Chinese manufacturing triggered a selloff that halted trading in Shanghai. Saudi Arabia and some of its allies severed or downgraded ties with Iran in the biggest meltdown in relations between the two regional powers in almost three decades.

The gain in gold followed a third straight year of losses in 2015, as prospects for rising U.S. interest rates boosted the dollar and made competing assets that offer a yield more attractive. Shares of bullion producers rallied on Monday, with Newmont Mining Corp., the biggest U.S. gold producer, rising to the highest since mid-December.

Gold futures for February delivery rose 1.4 percent to settle at $1,075.20 an ounce at 1:45 p.m. on the Comex in New York, the biggest advance since Dec. 21. The precious metal sank 10 percent last year, capping the longest slump since 1998.

Holdings in gold exchange-traded products dropped 2.56 metric tons to 1,463.9 tons on Friday, near the lowest in more than six years, according to data compiled by Bloomberg. The assets shrank 8.3 percent in 2015, a third year of declines.

Silver futures for March delivery rose 0.3 percent to $13.841 an ounce on the Comex. On the New York Mercantile Exchange, palladium and platinum retreated.

Source: Bloomberg

U.S. Stocks Tumble After Selloff in China Renews Growth Concern

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U.S. stocks tumbled to start 2016, as a rout in Chinese equities renewed concern that an economic slowdown there will damp global growth.

Investors returning to the market after the New Year holiday faced a worldwide selloff sparked by weak factory data in China, while a reading that showed the fastest contraction in U.S. manufacturing in six years bolstered anxiety that slowing growth in the world’s second-largest economy is spreading. A flareup in tension between Saudi Arabia and Iran added to the unease.

The Standard & Poor’s 500 Index fell 1.5 percent to 2,012.98 at 4 p.m. in New York, after sliding as much as 2.7 percent, for its worst start to a year since 2001.

Trading was halted in China after a 7 percent drop in the CSI 300 Index of large-capitalization companies listed in Shanghai and Shenzhen amid deteriorating manufacturing data. Chinese policy makers, who went to unprecedented lengths to prop up stock prices during a summer rout, are trying to prevent financial-market volatility from weighing on economy set to grow at its weakest annual pace since 1990.

Source : Bloomberg

U.S. Stocks Fall After Selloff in China Renews Growth Concern

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U.S. stocks fall to their lowest levels since October to start 2016, with the Dow Jones Industrial Average down more than 400 points as a rout in Chinese equities renewed concern that an economic slowdown there will damp global growth.

Investors returning to the market after the New Year holiday faced a worldwide selloff sparked by weak factory data in China, while a reading that showed the fastest contraction in U.S. manufacturing in six years bolstered anxiety that slowing growth in the world’s second-largest economy is spreading. A flareup in tension between Saudi Arabia and Iran added to the unease.

The S&P 500 fell 2.3 percent to 1,996.90 at 12:25 p.m. in New York, after ending 2015 with an annual decline for the first time since 2011. The Dow Jones Industrial Average lost 423.57 points, or 2.4 percent, to 17,001.46. The Nasdaq Composite Index dropped 2.9 percent, while the Chicago Board Options Exchange Volatility Index jumped 24 percent, the most in three weeks. Trading in S&P 500 shares was 30 percent above the 30-day average for this time of day.

Trading was halted in China after a 7 percent drop in the CSI 300 Index of large-capitalization companies listed in Shanghai and Shenzhen amid deteriorating manufacturing data. Chinese policy makers, who went to unprecedented lengths to prop up stock prices during a summer rout, are trying to prevent financial-market volatility from weighing on economy set to grow at its weakest annual pace since 1990.

Source : Bloomberg

European Stocks Slammed by Chinese Market Rout

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European stocks were in a sea of red on Monday, as a sharp selloff in China scared investors out of equities.

The Stoxx Europe 600 index slumped 2.5% to close at 356.66 in the first session of the new year, after gaining 6.8% in 2015. All major sectors were in the red, led by basic materials, consumer goods and financial plays.

Equity strategists have generally been optimistic about the outlook for European stock markets in 2016, but the action on the first trading day of 2016 was exactly the opposite. All regional benchmarks were trading sharply lower, most notably Germany’s DAX, in the wake of the plunge in Chinese shares that was fueled in part by disappointing Chinese manufacturing data. Stocks in China at one point dropped almost 7%, triggering a circuit breaker that halted trading on the mainland for the rest of the day.

Source: MarketWatch