OPEC Lowers Oil Prices Further

December 11, 2014

In the middle of the trading week, the world’s financial markets closed mixed but the bears had an advantage. As such in Europe, the British FTSE 100 fell 0.45 percent down to 6,500.04 points, the German DAX grew 0.06 percent up to 9,799.73 points while the French CAC 40 dropped 0.84 percent closing at 4,227.91 points.

On the Russian floor, the MICEX index gained 0.79 percent going up to 1,486.85 points whereas the RTS index shed 0.29 percent down to 855.05 points.

In the USA, the Dow Jones Industrial Average fell 1.51 percent down to 17,533.15 points, the Standard & Poor's 500 dropped 1.64 percent closing at 2,026.14 points, and the NASDAQ Composite slumped 1.73 percent down to 4,684.03 points.

The NYMEX price of the WTI oil future plunged by $2.88 making $60.94 a barrel. The ICE price of the Brent oil future went down by $2.60 and closed at $64.24 a barrel. Such a significant drop in prices was due to the announcement by the Organization of the Petroleum Exporting Countries (OPEC) about lowering its outlook for oil demand in 2015. The organization estimates that in 2015 global demand of oil supplies by OPEC members will be 28.9 million barrels a day, which is 1.15 million less than their output as of November 2014. The oil demand forecast for 2015 is the lowest since 2003. According to OPEC, the reasons for such a decline are US shale oil supply growth and a general decrease in oil demand by the global community.  

On the Forex market, EUR/USD is on the rise. If it finishes the day above 1.2565, it may mean a trend reversal. Right now, this can be considered just as a correction. 

Anna Gorenkova, NordFX Analyst

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