Oil swings on OPEC and Russia Rumours

It’s been another one of those days that yet again has oils finger prints all over it. Yet more huge swings in oil have sent equity markets globally doolally after firstly we heard from sources that Saudi Arabia were ready to make a 5% production cut, this was then subsequently supported by Russian quotes and yet again the rumours of meetings between OPEC and Russia were reissued to the media. The news saw oil jump from lows of $31.76 to highs of $34.77, this was before all of the rumours were then denied and markets fell lower yet again. The huge swings in markets currently leave many investors with very little choice but to sit on their hands when it comes to longer term and directional positions, and the will they won’t they saga that is likely to rumble on between OPEC and Russia will not help matters.

There has been some divergence between the US and Europe though today as US equity markets have managed to post modest gains on the back of better than expected earnings news. Most notably Facebook was trading higher by over 13% after the company posted record revenues and showed that the poor news out of Apple was not the sign of weakness in all tech stocks. At one point in the session Facebook shares were responsible for 30% of the move higher in the Nasdaq.

Overall markets have had to grapple with the oil price, despite some big data released in the last 24 hours. First thing we saw UK GDP come in in line with expectation and move the pound, we also saw US durable goods and initial jobless claims, but while the market is so dominated by the swings in oil it feels like everything else will just be background noise until we get a little stability.