Oil drops on OPEC downgrade while stocks make gains
Stock markets continue to show plenty of resilience in the face of geopolitical worries, but oil has been hit by gloomy forecasts again, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
Equities climb the wall of worry
“China is ramping up its activities against Taiwan and the clock continues to tick down to an Israeli strike on Iran, but stock markets have shrugged off these and other worries. The Dow and S&P 500 have climbed to new highs in the lull between US bank earnings, while even the FTSE 100 has edged higher, though it remains firmly stuck in its six-week range. European stocks have remained supported by the expectation of a rate cut from the ECB, though whether this justifies the Dax’s recent exuberance remains to be seen.”
OPEC cuts forecasts again
“OPEC’s decision to cut its oil demand forecasts has weighed on crude prices once again, though both buyers and sellers are all too aware that the outlook remains cloudy thanks to the lack of any Israeli response to Iran. However, it seems that the time for such a response is at hand, which might at least power a short-term surge in oil prices.”
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