Equity index futures indicating down 152 on the DJIA and down 21.25 on the S&P 500.
With every downtick starting to feel the old "Long ain't wrong" vibe.
From Bloomberg:
The lowest oil price in four years will provide stimulus of as much as $1.1 trillion to global economies by lowering the cost of fuels and other commodities, according to Citigroup Inc.
Brent, the world’s most active crude contract, closed at $83.78 a barrel in London yesterday. That’s more than 20 percent below its average for the past three years, amounting to savings of about $1.8 billion a day based on current output, Citigroup estimates. Savings will climb to $1.1 trillion annually as the slide cuts costs of other commodities, leaving consumers and companies with extra cash to spend and bolstering growth, according to Ed Morse, the bank’s head of global commodities research in New York.
Crude prices are plunging amid signs that OPEC, supplier of 40 percent of the world’s oil, won’t act to eliminate a surplus as global growth slows. Combined supplies from the U.S. and Canada rose last year to the highest since at least 1965 as producers tapped stores locked in shale-rock formations and oil sands. The global economy will rebound next year, with growth quickening to 2.98 percent, the fastest since 2010, according to analyst forecasts compiled by Bloomberg.
“A reduction in oil prices also results in a reduction in prices across commodities, starting with natural gas, but also including copper, steel, and agriculture,” Morse said yesterday in an e-mailed response to questions. “All commodities are energy intensive to one degree or another.”
Commodity Prices
Regular gasoline averaged nationwide in the U.S. dropped to $3.177 a gallon, the lowest in more than three-and-a-half years, Heathrow, Florida-based motoring group AAA said on its website yesterday. The Bloomberg Commodity Index slumped to a five-year low, about 50 percent below its peak in July 2008. Copper, natural gas, coal and iron ore are all far below their peaks.
“Cheaper oil is an advantage for both consumers as well as industrial and manufacturing operations, especially as winter approaches,” Myrto Sokou, an analyst at Sucden Financial Ltd. in London, said by e-mail yesterday....MORE
