Commodity Markets In Distress As Oil Rout Continues
One hundred and eleven years after the birth of Count Basie, and the ongoing rout in the crude complex is in full swing today. Downhill one-way traffic continues amid headlines such as ‘No End in Sight for Oil Glut‘ and ‘Oil Poised for Longest Weekly Losing Streak Since 1986 Amid Glut‘. As the headlines get more apocalyptic, and the price projections get lower (this week: $15 oil, no, $10 oil), the more it feels like we are approaching a turning point. Or at least a whipsaw.
Looking at the overnight data releases, China has served to endorse the current mood of doom and gloom via a preliminary manufacturing print of prodigiously downbeat proportions. A print of 47.1 was seen, which was considerably lower than last month’s 47.8, and shy of the consensus of 47.7. It is the lowest print since March 2009 (hark, the belly of the great recession).
Related: Hungry Venezuela Eyes $40 Billion Offshore Discovery In Guyana
China Caixin Preliminary PMI (source: investing.com)
In other preliminary releases, Eurozone manufacturing on the aggregate came in above consensus (and in line with last month’s level), aided by a decent number from Germany, but held in check by a miss from France (showing increasing contraction to boot). Eurozone services data on the aggregate also beat consensus, ticking higher on the prior month.
Related: Supply, Demand Equilibrium Further Away Than Ever Before
Weakness across the commodity complex as a whole continues to be an ongoing theme in global markets. The below chart illustrates the losses seen in the stock prices of various oil and mining companies, with Bloomberg estimating that $2.05 trillion has been wiped off their market caps. Meanwhile, the Bloomberg Commodity Index of 22 raw materials has dropped to its lowest level since 2002.
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