Oil prices moved lower on Monday, Nov. 17, as global market participants responded to concerns about the strength of the global economy.
By 2:48 p.m. Eastern Time, December West Texas Intermediate oil was 0.34 percent lower for the day at 75.56 per barrel, while January brent crude was down 0.28 percent at 79.19, according to data from Bloomberg.
Japan Falls into Recession
Japan, which is the world’s fourth-largest oil consumer, fell into a recession in the third quarter, as its gross domestic product dropped an annualized 1.6 percent during the period, Reuters reported. This contraction happened amid lackluster exports and weak consumption.
Survey: Investors concerned about economy
In addition, 38 percent of investors participating in a recent Bloomberg Global Poll stated that the international economy is deteriorating. This fraction was the highest for this particular survey since September 2012, when Europe was suffering recession. The figure was also more than twice as high as the portion who had this perception in the last poll, which took place in July.
Many of the respondents expressed concern about the economy of the euro zone, with two-thirds asserting that business conditions there are going downhill, according to the news source. Forty-three percent contended the European Central Bank’s policies did not offer enough leeway, compared to 31 percent in the last poll. This change in sentiment came along with a deteriorating view of Mario Draghi, president of the ECB. While 74 percent had a favorable perception of him in July, this portion fell to 59 percent.
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While many of the participants in Bloomberg’s worldwide survey focused on the euro zone, they also provided input on other regions, with the majority stating that economic conditions in the BRIC economies – Brazil, Russia, India and China – are deteriorating, up from 36 percent in July.
G-20 policy initiatives
Amid these challenges, leaders from the Group of Twenty nations recently proposed policy measures to boost growth during a two-day summit in Brisbane, according to Bloomberg. The group submitted more than 1,000 of these initiatives, and stated they would work together to ensure the plans were indeed implemented. Shane Oliver, who works for AMP Capital Investors Ltd. as the Sydney-based head of investment strategy, spoke to the situation.
“It’s a worthy objective for the G-20 as global growth is still lagging,” Oliver told the news source. “But a lot of those measures might not be fully implemented and, even if they do, they may not deliver the results.”
Frederic Neumann, co-head of Asian economics at HSBC Holdings Plc in Hong Kong, also weighed in, writing in an e-mail that while the plan set forth by the G-20 leaders certainly has ambition, it lacks details. He emphasized that structural reform is crucial to jumpstart economic growth, and that global leaders could focus on trade to help improve business conditions.
Investors interested in crude oil trading might benefit from knowing about the decline that the commodity suffered on Monday, Nov. 17. Being aware of the global economic concerns that coincided with this drop might also help these investors to make better-informed decisions.
The post Oil Prices Decline amid Global Growth Concerns appeared first on | HY Markets Official blog.
