Monday, January 4, 2016

Oil slips as glut worries eclipse Saudi-Iran tensions

Oil slips as glut worries eclipse Saudi-Iran tensions

[NEW YORK] Oil prices fell on Monday as worries about oversupply and weak economic data from China eclipsed escalating tensions between major oil producers Saudi Arabia and Iran.
US benchmark West Texas Intermediate for delivery in February fell 28 cents to US$36.76 a barrel on the New York .
Brent North Sea crude for February, the global benchmark for oil, slipped six cents to US$37.22 a barrel in London.
"Petroleum markets drew some initial support on the rising tensions between Saudi Arabia and Iran after Saudi Arabia executed a prominent Shiite cleric Saturday on a terrorism charge, triggering protests, and then a severing of diplomatic ties," said Tim Evans of Citi Futures.
"The immediate worry here is that the simmering longer-term tensions here could boil over into a more direct military confrontation that would put oil production and shipments from the region at risk," he said.
But early price gains fizzled as traders returned to focus on the prolonged global supply glut and another weak report on manufacturing in China, the world's largest energy consumer.
The standoff between Saudi Arabia and Iran poses "no real risk of any oil disruptions at this point and time," said Again Capital founding partner John Kilduff.
"The overall glut is just an immovable force at this point and time and nothing short of actual war will stop that," he added.
Citi's Evans pointed out that the Saudi-Iran tensions also made it "somewhat more difficult" for the 13-member Opec cartel to reach any agreement that could limit supplies.
Opec decided last month against cutting output levels to shore up crude prices, instead choosing to maintain market share faced with competition from North American shale oil output.
Mr Kilduff said that poor Chinese manufacturing data weighed on sentiment. Factory activity fell to its weakest level in a quarter of a century in December, the 10th straight month of sector contraction.
AFP

Global stocks begin 2016 with China growth hangover

Global stocks begin 2016 with China growth hangover

[NEW YORK] Fresh evidence of China's economic slowdown sent world stock markets tumbling on Monday, with Europe and the United States following Asia sharply lower in a gloomy start to 2016.
Shanghai equities plunged seven percent, leading an Asian retreat, as more weak factory data fanned fears about the health of the world's second-biggest economy.
In Europe, Frankfurt posted the heaviest losses, diving 4.3 per cent. Milan slumped 3.2 per cent and Paris shed 2.5 per cent.
London stocks lost 2.4 per cent, with China-exposed mining companies falling the heaviest.
Wall Street joined the sell-off, with the S&P 500 falling 1.5 per cent.
"It hasn't been a textbook start for 2016. It's in fact been one of the worst first trading days on record," said market analyst Jasper Lawler at CMC Markets UK.
"Markets have been swept up in a renewed fear that China's economic slowdown is picking up speed after surprisingly weak manufacturing data," he added.
The sell-off came as financial markets reopened after Friday's new year holiday.
London's top fallers were mining giants Anglo American, which tanked 7.2 percent, and Glencore which dropped 5.8 per cent, on demand fears in leading commodity consumer China.
In the US, some of the biggest equity winners from 2015 fell hard in a decline analysts attributed to profit taking. Amazon tumbled 5.8 per cent, Netflix 3.9 per cent and Priceline, Facebook and Google parent Alphabet all lost about 2.3 per cent.
Global markets were also spooked over the flare-up in tensions between Iran and Saudi Arabia.
Following angry protests over Saudi Arabia's execution Saturday of prominent Shi'ite cleric and activist Sheikh Nimr al-Nimr, Saudi Arabia and then Bahrain and Sudan severed relations with Iran, the main Shi'ite power.
Oil prices initially gained on the Saudi-Iran rift, but fizzled as traders returned to focus on the prolonged global supply glut and the weak China data.
"On the first trading day of 2016, the markets have got off to a shocking start," said analyst Manoj Ladwa at brokerage TJM Partners.
"The problems in the Middle East have taken a turn for the worse with the Saudi-Iran stand-off. And China has only added to the negative sentiment as their economy shows further signs of slowing," he told AFP.
Authorities in China suspended trading on its stock markets in the early afternoon after shares collapsed.
The drop in the CSI300 index - which covers the Shanghai and Shenzhen bourses - for the first time triggered an automatic early closure under a "circuit breaker" mechanism to curb volatility, after an earlier 15-minute trading halt had failed to stem the declines.
The sharp losses revived memories of the summer rout that saw Shanghai crash about 40 per cent and trillions of dollars wiped off valuations.
"This situation has gotten the market off to a very ugly start," said Peter Cardillo, chief market economist at First Standard Financial.
AFP

US: Stocks fall on China worries; Dow loses 1.6%

US: Stocks fall on China worries; Dow loses 1.6%

[NEW YORK] US stocks opened 2016 on a dreary note on Monday, falling sharply on worries about plunging Chinese equities and a brewing diplomatic crisis between Saudi Arabia and Iran.
The Dow Jones Industrial Average shed 276.09 points (1.58 per cent) at 17,148.94.
The broad-based S&P 500 fell 31.28 (1.53 per cent) to 2,012.66, while the tech-rich Nasdaq Composite Index dropped 104.32 (2.08 per cent) to 4,903.09.
The losses in the US came on the heels of bruising trading sessions in Asia and Europe after the Chinese stock market fell about seven percent on a poor report on manufacturing activity.
Analysts also pointed to concerns about the breakdown in relations between regional rivals Saudi Arabia and Iran following violent protests in Tehran against the Saudi execution of a prominent Shiite cleric and activist.
"This situation has gotten the market off to a very ugly start," said Peter Cardillo, chief market economist at First Standard Financial.
Adding to the bad news was a report from the Institute for Supply Management showing US manufacturing activity contracted in December for the second straight month.
Some of the biggest equity winners from 2015 fell hard in a decline analysts attributed to profit-taking. Amazon tumbled 5.8 per cent, Netflix 3.9 per cent and Priceline, Facebook and Google parent Alphabet all around 2.3 per cent.
US-traded Chinese stocks were in retreat, including Alibaba and Baidu, which sank 5.6 per cent and 2.7 per cent, respectively.
However, retail stocks enjoyed an up day. Wal-Mart Stores added 0.3, per cent, Macy's 2.3 per cent, Target 1.3 per cent and Best Buy 0.7 per cent.
Pharma company Baxalta climbed 5.5 per cent on reports it is in advanced talks to be acquired by Shire for about US$32 billion.
Tesla Motors tumbled 6.9 per cent as it announced it shipped 17,400 cars in the fourth quarter, near the low end of the company's projected 17,000-19,000 range.
AFP

Oculus to start taking virtual reality headset orders

Oculus to start taking virtual reality headset orders

[LAS VEGAS] Facebook-owned Oculus VR will begin taking orders for its Rift virtual reality headsets on Wednesday, as the doors of Consumer Electronics Show gadget extravaganza officially open in Las Vegas.
Oculus on Monday did not disclose pricing or when headsets would ship, but promised to share "everything you need to know to order your Rift" when pre-orders go live at 8.00am (1600 GMT) in California, where the company is based.
Rift pre-orders will come with two games, Lucky's Tale and Eve:Valkyrie. Oculus founder Palmer Luckey will field questions during a Reddit AMA set to begin at 6.00pm on Wednesday (0200 GMT Thursday).
Oculus VR wooed software makers in September with the promise of a budding "virtual reality era" and an alliance with streaming television powerhouse Netflix.
Some 1,500 people already intrigued by the potential of virtual reality packed the Dolby Theatre in Los Angeles for keynote presentations at a second annual Oculus Connect developers conference.
"We believe the more power people have to share and experience all kinds of different things in the world, the better the world will be," Facebook co-founder and chief Mark Zuckerberg told the audience during a brief appearance on stage.
"After video, the next logical step is fully immersive virtual reality."
Facebook bought Oculus VR last year in a deal valued at US$2 billion, heralding virtual reality as the next generation computing platform and one that will let people instantly "travel" to new places.
The Consumer Electronics Show is expected to feature an array of virtual reality offerings hoping to challenge headsets to be fielded by Oculus, Sony, and Valve.
AFP

Obama to force through gun control measures

Obama to force through gun control measures

[Washington] US President Barack Obama will on Tuesday introduce a raft of executive actions to tackle US gun violence, bypassing Congress and its staunch opposition to gun control.
Kicking off his last year in the White House with a show of executive power that is replete with political and legal risk, Mr Obama will take a series of unilateral steps to end what he has called "the scourge of gun violence."
Mr Obama is scheduled to unveil the measures in the East Room of the White House, his adminstration said in a statement Monday.
Speaking ahead of the announcement, Mr Obama used Oval Office remarks to decry high rates of mass shooting and gun suicide in America that far exceed levels in other countries.
"We have tens of thousands of people every single year who are killed by guns," he said.
Mr Obama indicated the proposals - presented to him by Attorney General Loretta Lynch at the White House - will focus on regulating gun sales and curbing illegal purchases.
Aides say that could include tightening rules on gun dealers, broadening background checks to more buyers and cracking down on "straw purchases" in which potentially suspect individuals buy guns through an intermediary.
The measures will stop short of registering or collecting some of the more than 300 million guns already thought to be in circulation in the United States, a move gun control advocates say is essential.
Mr Obama admitted the measures were "not going to solve every violent crime in this country. It's not going to prevent every mass shooting. It's not going to keep every gun out of the hands of a criminal." "It will," he said, "potentially, save lives in this country" and spare families heartache.
During Mr Obama's seven years as president, mass shootings have killed Connecticut schoolchildren, South Carolina churchgoers, Colorado movie watchers.
Deaths from gun violence, many of them suicides, average 30,000 per year in America.
Polls had shown most Americans back tougher gun laws. But that support has ebbed recently amid concerns about the Islamic State group and the wider threat from terrorism.
Mr Obama's move could put pressure on some of his Democratic allies who face tough election battles in toss-up states and conservative congressional districts this autumn.
On Thursday, Mr Obama will take part in a primetime town-hall style debate on gun control to try to boost his case.
The event, broadcast by CNN, will take place at George Mason University in Fairfax, in northern Virginia.
In a New Year's address to the nation, Mr Obama voiced his determination to tackle what he called the "unfinished business" of curbing gun violence.
But Mr Obama's decision to bypass Congress sets up a political and legal fight for the coming election year.
The Republican-controlled body has already rejected measures to curb the sale of military-style semi-automatic rifles.
The speaker of the House of Representatives, Paul Ryan, on Monday accused Mr Obama of "dismissiveness" toward Americans who value the constitutional right to bear arms.
"We all are pained by the recent atrocities in our country, but no change the president is reportedly considering would have prevented them," said Mr Ryan. "We have seen consistently that an underlying cause of these attacks has been mental illness." "This is a dangerous level of executive overreach, and the country will not stand for it," Mr Ryan warned.
By using the last resort of executive action, Mr Obama is inviting legal challenges alongside the predictable political opprobrium.
His lawyers have spent months "scrubbing" existing laws to see where rules could be tightened and loopholes closed, while surviving inevitable court challenges.
"A lot of the work that has gone on behind the scenes to take a look at what the president can do using his executive authority has been grounded in the knowledge that the gun lobby and the Republicans in Congress who regularly do their bidding are going to look for ways to try to stop it," said White House spokesman Josh Earnest.
Mr Obama insisted the measures would fall "well within my legal authority." Similar executive efforts by Mr Obama to bring millions of illegal immigrants out of the shadows by shielding them from deportation have prompted a slew of lawsuits and left a key Obama policy goal in the hands of the Supreme Court.
AFP

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