Metals

The drop in oil prices is a slowdown in global economic signal. This was stated by the European Central Bank (ECB) in anticipation of the Economic Bulletin, explaining that "while in 2014 most of the drop in oil prices could be explained by the significant increase in the supply of crude oil, the lowest price of the most recently is the reflection of the decline in global demand ".

The ECB warns that "even if the low price of oil may support domestic demand due to rising real incomes in the importing countries, this may not necessarily offset the wider effects of the weakening of global demand."

Despite the June summit has not led to any conclusion, OPEC saw off the production in May. This was revealed by the latest monthly bulletin of the cartel, which confirms also relatively flat demand. According to the latest Oil Market Report, the demand is expected to grow by 1.2 million barrels a day this year to 94.18 MBG, an estimate that are left untouched by previous forecasts.

Oman has raised funds on international markets to stem the financial crisis caused by the collapse in oil prices. Thus, the government of the Arab country has placed 2.5 billion usd bonds, becoming the last country of the Gulf, in order of time, to rely on debt to support its budget market.
The sale is the first Omani issue on international markets for almost two decades. The government placed five-year notes at a coupon rate of 3.625%, and a 10-year at 4.75%. The yields of both bonds were lower than the initial guidance, reflecting a strong demand from local and international buyers. The total demand received from the Government should have been around 7 billion USD, reported the source.

According to the latest report, the US crude futures advanced for a third consecutive day on Wednesday, reaching new 2016 highs. The US benchmark posting a nearly 11-month closing record. On the New York Mercantile Exchange, West Texas Intermediate crude for July delivery added +0.62% and rose 87 cents, or 1.7%, to settle at $51.23-showing the highest close for a nearby contract since July 15. Meanwhile, August Brent crude, increased 0.42% the global oil benchmark, reaching $1.07, or 2.1%, to finish at $52.51 a barrel on London’s ICE Futures exchange, its highest close since October. According to the analysts, futures were affected in a positive way boosted by reports of another attack on oil facilities in Nigeria. They were also buoyed by data from an industry trade group, the American Petroleum Institute, which on Tuesday said that US crude inventories had fallen by 3.6 million barrels. Also, crude found support from continued supply disruptions, as well as China import data and a decline in crude inventories.

Saudi Arabia has announced to European customers a discount on crude oil by strengthening the signal of growing competition between the two producers of the OPEC cartel, Saudi Arabia and Iran.

The price cut comes after the new bankruptcy during the meeting in Vienna despite the efforts of the Arab country to converge towards a membership freeze of the production ceiling. The Vienna Summit would have to approve a bid rationing of the cartel, but are still conflicting views. In particular, Iran remains opposed, and has recently restored its production, after the long stall caused by contention on nuclear power.

The United States throw accusations at China on the issue of unfair competition and dumping in the steel sector, plagued by excess capacity globally but especially right in the Asian giant. "In line with the reforms of China, the United States supports efforts to reduce excess capacity and leave it to market forces to determine investment", the State Treasury Secretary Jack Lew said, pointing the finger at " the "Chinese excesses" that distort global markets. "

OPEC fails to take any decision regarding the production, despite the efforts of Saudi Arabia’s accession to merge towards a freeze of the production ceiling. The oil is reacting very badly to this news and collapses on today’s minimum: WTI yields 1.7% to $ 48.16 a barrel and Brent 1.2% to $ 49.09.

After 4 hours of debate, the 13 OPEC oil ministers have not found the agreement. At the opening of the debate this morning, the Minister of Qatar Mohammed Bin Saleh al-Sada said that the cartel expects a sharp decline in non-OPEC production in 2016.

In Brazil, Petrobras scandal strikes again: yesterday evening, the Brazilian Minister of Transparency, Fabiano Silveira, resigned after an interception by leaked his critical investigation on the oil giant.

It is the second part of the interim government to fall for Petrobras scandal. On 23 May, the Minister of Planning, Romero Juca, was dismissed by the government after an interception in which he argued that it would take a "pact" to force President Dilma Rousseff to step down to stop the investigations.