Oil prices: forecasts can’t help – everything depends on Dow Jones

Oil Prices: bears optimism and unstable Dow Jones

In brief: Oil prices will not grow in the coming weeks. The grounds for the growth of prices for black gold can not find even bulls. Expensive gold and the dollar, cheaper oil. The future depends on Dow Jones Industrial Average.

Everything depends on Dow Jones Industrial Average… Players of the American stock market recorded a profit. The reason for this was enough. On the eve of the major U.S. indices soared 2,85-3,73%, and ahead of the market a three-day weekend (Monday U.S. stock exchanges are closed on the occasion of Remembrance Day), for which Europe has a lot to happen. This negative began to flow on Friday: First, Spain has revised GDP growth forecast in 2012. downward – from 2,9 to 2,5%, and in the evening the international rating agency Fitch Ratings downgraded the long-and short-term issuer default ratings of Spain’s foreign and local currency from AAA to AA +. Investors in these circumstances could not close his eyes.

Do not be left without attention and published in the United States, macroeconomic statistics. Proved disappointing data on the amount of personal spending and incomes in April: the last rose is not so much as we would like economists, and the costs relative to the previous month had not changed at all. Left figures show, firstly, the very moderate pace of economic recovery, because without growth in consumption, this process may be delayed, and secondly, the uncertainty of Americans in the future – growth of revenues went to increase savings. Published, the index of consumer confidence for May, however, suggests otherwise: it rose to 73.6 points, although experts do not expect changes to the provisional estimates of 73.3 points. Bidders that do not seem very trust in these figures, since a fall in stock indices after the release of these statistics has not stopped. The May index of business activity, calculated by the Chicago association of purchasing managers, notably nedotyanulo to forecast and amounted to only 59.7 points (to 2.3 percentage points below expectations), pointing to a slowdown in business activity. The rise of the index for the first six months, “faltered” in March, and now a new slowdown raises questions about the trend turns. Change the course of trading on Friday failed message stating that the lower house of Congress approved a package of measures the volume of 79 billion dollars aimed at stimulating economic recovery and fight against unemployment. Democrats are confident that this way they can significantly reduce unemployment from its current level of 9,9%. Against this backdrop, the stock market bounced up, but to enter the territory of the green forces “bulls” still not enough.

As a result of trading on May 28 the Dow Jones index fell by 122.36 points (-1.19%) – up to 10,136.63 points, NASDAQ down on 20.64 points (-0.91%) – up to 2,257.04 points, S & P lost 13.65 points (-1.24%) and amounted to 1,089.41 points. Under the greatest pressure on Friday were oil service companies, which, due to ongoing work in the Gulf of Mexico oil spill lose contracts. In addition, the lower house of Congress are beginning to think about how to remove the upper threshold of liability for damage of ecology and economy due to injury, such as oil spills. It has been proposed from the current level of 75 million dollars to raise it to $ 10 billion, and is now investigating the possibility to cancel the “ceiling” in general. In the case of realization of this idea invest in oil and gas and oil service companies will become far more risky. At such a negative background capitalization Baker Hughes Inc. fell to 7,18%, Halliburton Co. – 8%, Schlumberger Ltd – on 6,12%. In the last place on the eve of closing the register of shareholders to receive dividends, though minor – 0,35% of the value of the shares at the end of the day May 27.

Although oil and gas companies and suffered from a small rollback in oil prices – the mark of 73.3 dollars per barrel. sort by Brent, they still look much better oilfield. Thus, Exxon Mobil Corp. limited decrease in 1,63%, Chevron Corp. – On 0,66%, ConocoPhillips – on 0,67%, XTO Energy Inc. – On 1,5%, EOG Resources Inc. – On 1,57%, Marathon Oil Corp. – On 1,74%. Comparable with the oil service companies losing hold of only Texas Oil and Gas Anadarko Petroleum Corp. – It quotes have failed on 5,83%.

U.S. banks, traditionally sensitive to global economic problems, have not remained aloof from the sales. Greatest losses in The Bank of New York Mellon Corp. (-2.96%) And Bank of America Corp. (-2.72%), Slightly more optimistic looked JPMorgan Chase & Co. (-2,08%), Wells Fargo & Co. (-2,45%), Citigroup Inc. (-1,49%), U.S. Bancorp (-1,92%) and Morgan Stanley (-1,99%). Is in the final time under pressure because of the charges against him in the fraudulent derivatives Goldman Sachs Group Inc. May 28 looked better than others and limit the drop by only 0.48%. Thus, the last trading session of spring in the U.S. market was in a negative way, resulting in the entire week culminated with the collapse of indices. Now the U.S. market, as well as Russian, is at a crossroads, because it is unclear what will happen in the summer – a lull or a decline. Bidders expected from the S & P confident of attempts to gain a foothold above the level of resistance of 1100 points and a further rise to the immediate objectives of 1120-1130 points, but this did not happen. Index Dow Jones, though, remained above the turn of 10000 points, and this gives us some hope. In addition, the weekly candle chart appeared “hammer” that after a long decline in May indicates the completion of “bear” trend. It is a pity that it did not mention the economy of the European Union, the trends in the foreign exchange market, and military conflict on the Korean peninsula.

Pavel Migin
2010-05-30 16:17, Economics.

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One comment к “Oil prices: forecasts can’t help – everything depends on Dow Jones”

  1. Jose Grimez Says:

    The number of older and retired people in the US is increasing.This group does not spend money when banks and the fed are paying no real interest to this group.Instead, the US is printing money in the hope that banks will lend to the jobless who cannot pay back. Factor in the free money given to the irresponsible and the hopes for a sustainable economic recovery are dimmed. ..US interest rates should be raised to a level where the largest group of americans will feel comfortable spending again…

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