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Oil decline putting pressure on the commodity sector


The European markets all pulled back this morning, with the latest oil-decline putting pressure on the commodity sector.

Spreadex Analyst, Connor Campbell noted “The FTSE fell nearly 60 points after the bell, hitting its worse price since it soared off the back of the pound’s post-election plunge.”

“That’s because Brent Crude is now below $47 per barrel, its lowest point in almost a year, after the International Energy Agency warned that its 2018 forecasts made ‘sobering reading for those producers looking to restrain supply’.”

“This dragged BP and Shell down by 0.6% and 0.8% respectively, while the miners were also in the red, Anglo American leading the pack with a 3% decline.”

The focus will be on sterling today, ahead of the Bank of England monetary policy meeting, but no changes in policy are expected.

ADS Securities Analyst, Konstantinos Anthis commented “Following the result of the elections traders will be more interested to see whether it will affect the central bank’s tone.”

“The BoE had been rather bullish in recent times encouraged by the impressive performance of the domestic economy and the past month was mostly positive as well but stagnating inflation remains the key issue for Governor Carney”

“Over in the US, equity markets were mixed on Wednesday following the Fed rate hike” suggested Accendo Markets Analyst, Mike van Dulken, “with the Dow Jones outperforming other bourses to close at another all-time closing high.”

“Weakness in Energy names saw the S&P 500 close lower, while continued Tech weakness weighed on the sector-heavy Nasdaq”

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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