Timid gains in the main markets of the Old Continent, still pending oil price evolution
European equity markets are struggling to regain some of the ground lost in the last session and the Ibex-35 moves forward timidly looking for 7,600 points, in a session with few macroeconomic references save for new data about the US labor market.
Sacyr leads the selective gains by over 4.5%, followed by IAG (+2.47%), Meliá Hotels (+1.75%), Merlin Properties (+1.58%), Indra (+ 1.19%) and Inditex (+0.75%). At the bottom of the table were ArcelorMittal (-1.06%) and Repsol (-0.82%) accompanied by the banks, which again exerted downward pressure with the slight decline in bond yields.
A fall in interest rates (moving inversely with the price) but not enough for the ten-year Spanish bond to leave the 3% limit.
Without great economic data to mark the evolution of the market, investors are closely following oil price movements after OPEC and its allies decided on Wednesday to drastically cut production by two million barrels a day. The goal is to keep prices around $90 a barrel, an important level for many of these countries to keep their budgets in order.
The problem is that keeping prices high could pose a new risk to the inflationary fight initiated by governments and central banks. “In effective terms, the decision involves the withdrawal of some 850,000 million barrels per day, as most OPEC+ members have been out of production quotas for months,” said Link Securities’ analysis department.
The message is clear: none of the major producers is willing to let the price of crude oil fall much more than it did in the last quarter, when it went from over $120 to around $80.
Following the decision, the oil price will maintain the increases that started on Wednesday, albeit more moderately. The barrel of Brent, a reference in Europe, is already trading at more than $93, while the US West Texas is above $88.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
