90 seconds at 9 am with BNZ

90 seconds at 9 am with BNZ: Oil price jumps as OPEC refuses to lift output; Moody's warns may cut UK rating; German output weak

9th Jun 11, 7:41am by Bernard Hickey

Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news OPEC failed to agree on an oil output increase for the first time in 20 years, sending oil prices more than 2% higher overnight.

See more here from Bloomberg on OPEC's failure to agree on an output increase.

Nymex crude rose over US$100 a barrel as a new report from the US government said oil demand would increase by 1.7 million barrels a day this year to 88.43 million barrels per day. The oil demand forecast came as Japan increases its demand for oil to replace electricity production lost in the Fukushima meltdowns. See more here from Reuters on the oil demand forecast increase.

The Dow was marginally stronger in late trade as energy stocks rose with the oil price.

Meanwhile the US dollar also strengthened against many currencies as markets digested the implications of US Federal Reserve Chairman Ben Bernanke's apparent reluctance to carry out a third round of quantitative easing or money printing despite a weakening economy. However, the Yen rose as concerns about US growth and Europe's debt crisis saw some seek refuge in the world's third largest economy. See more here at Bloomberg.

German industrial output was surprisingly weak, adding more fear to the European debt crisis.

Gold also fell on talk that the Fed may not print again. See more here at Bloomberg.

Elsewhere, the Pound fell after a Moody's official warned Britain's Aaa credit rating may be downgraded. See more here at Bloomberg.

The New Zealand dollar was marginally weaker overnight ahead of the Reserve Bank's June quarter Monetary Policy Statement due at 9 am. The bank is expected to leave the OCR on hold at 2.5%.

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15 Comments

by steven | 9th Jun 11, 8:20am 1307564423

I have to wonder whats going on here, Iran Im sure is flexing its muscles, its p*ssed Im sure, I dont understand why the rest are......and its almost like cutting your nose off to spite your face, at this level if the developed world collapses into another recession led by either the EU or the USA demand will collapse and they will be getting $35 again this year....and maybe $80 again in 2012.....it seems potty........unless they have decided the US exporting inflation is hurting them so bad its better to collpase / destroy the US's economy? seems an awfully big plan....

regards

by President of P… | 9th Jun 11, 9:15am 1307567706

nice the OCR is held and those indicated slow rises reducing the chance of large OCR rise like the 1.25's and more. so more time to sit back and relax, do the odd sums and a property here and there...

President of Property

by michael | 9th Jun 11, 9:16am 1307567810

First of all thank you Bernard for being early. Well this was a hawkish statement. I like it.

by andyh | 9th Jun 11, 9:27am 1307568475

Bernard - care to get your insurance correspondent to make a comment on this latest news out about AMI?

http://www.stuff.co.nz/business/money/5118833/Insurance-premiums-to-soar

''AM Best said the financial and issuer credit rating for AMI had now been given a stable outlook. The Christchurch company had prior to March 30 had a A+ (superior) rating.

The Government has agreed to back AMI with at least $500 million for five years after the Christchurch insurer sought that guarantee.''

I wasn't aware that the government had agreed to stand behind AMI for FIVE YEARS? Is this correct? If so it makes AMI possibly the safest insurance company (hence perhaps the turnabout from AM Best).

by andyh | 9th Jun 11, 9:32am 1307568723

LOL OPEC.

Even more LOLs that the media repeat their musings verbatim and dont challenge them.

It hasn't occurred to these dolts that OPEC has NO spare capacity to bring on-line. After the Libyan crisis erupted the Saudi's talked large about making sure the market was 'well supplied'. Well go see how much extra they actually pumped........

The data is out there - one just has to look.

by oildepletionz | 9th Jun 11, 9:34am 1307568864

maybe OPEC is pumping flat out and Saudi Arabia included - they have no spare capacity ?

by powerdownkiwi | 9th Jun 11, 9:42am 1307569331

At current rates, the Saudi's won't be exporting anything by 2030:

http://www.theoildrum.com/node/7767

by speckles | 9th Jun 11, 9:48am 1307569710

German output daty is telling.

by Gertraud T. | 9th Jun 11, 9:59am 1307570354

Read and weep:

Saudi Arabia to build 16 nuclear reactors

http://en.rian.ru/world/20110601/164367580.html

by andyh | 9th Jun 11, 10:14am 1307571272

Bbbbbbbuttttt.........why would they do that?? After all they are sitting on veritable oceans of oil!

Oh I know! The Saudis are suddenly worried about global warming and they want to cut their emissions! Of course!

D'oh!

by powerdownkiwi | 9th Jun 11, 10:53am 1307573623

two good items on Nine to Noon this morning.

One on oil exploration off our coast "as the world runs out of oil, it will........"

The other a report from the UK - prices for everything going up - including a Scottish energy (elec) Co putting up prices by 20%. Yep.

I wonder if KR puts (those) two and two together......... You don't need to make 5 - 3 would do it....

We're starting to see it in real time. Must go and finish off the glasshouse.

by Andrewj | 9th Jun 11, 11:45am 1307576723

PDK, i have to agree with you. Our future is going to be one of high energy prices creating a never ending cycle of recessions, as we recover from one recession renewed energy demand forces oil prices higher and back into recession we go.

by stevel | 9th Jun 11, 10:16am 1307571373

Resurgence of America’s debtor prisons

http://rt.com/usa/news/resurgence-america-debtor-prisons/

“In January, a judge sentenced a Kenney, Illinois, man to ‘indefinite incarceration’ until he came up with $300 towards a lumber yard debt.”

by Spidy Sense | 9th Jun 11, 10:41am 1307572909

Bernard, apologies for a random comment off topic but I was thinking I'd like to see a piece on NZ property using technical analysis rather than the boring old fundamentals(LOL). I understand it may be difficult to compile the data like for like, but It would be intriguing to see what the charts say.

Keep up the good work : )

by Wolly | 10th Jun 11, 5:49am 1307641790

Here's an interesting question....why would you invest in the commercial district in Chch or Wgtn...given the current events...why would you do it?