Lagarde speaks, raw materials at peak. King Midas on the contrary to the ECB …
Today was a very busy day for the energy markets, with WTI oil (but Brent also followed) losing nearly 4% and hitting a monthly low.
Although it seems a good thing, this downward movement will cost many jobs around the world in the sector without giving any particular economic advantage to consumers.
To give the touch of death to oil, with already many problems on the supply side, as we will highlight shortly, was Mrs Lagarde, president of the ECB who:
He warned that there is a clear deterioration in the outlook and that the recovery in the euro area is "losing momentum faster than expected".
Apart from the fact that the recovery has never started, we note that underlining it, by a president / governor of the Central Bank, means throwing a little petrol on the weak markets, just to use a term linked to the oil sector. Clearly, however, the second wave that everyone ignored in the spring (Gualtieri in the first place .. but he plays the guitar) will send the recovery in the old continent to peak. Other than very strong rebound !!
As far as the supply side is concerned, an unexpected excess is being produced. Indeed:
- stocks stored in the US grew more than expected;
- the reopening of production by the Benghazi has significantly increased the supply of Libyan oil;
At present the only part of the world where oil demand is sustained at the levels of previous years is China, which however is a very price-conscious buyer and increasingly tied to the Iranian product. Without a solution to the Covid-19 problem and further production cuts, we could see further drops in oil prices.
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The article Talks about the Lagarde, raw materials at peak. King Midas on the contrary to the ECB… comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/parla-la-lagarde-materie-prime-a-picco-re-mida-al-contrario-alla-bce/ on Thu, 29 Oct 2020 17:57:42 +0000.