All the latest economic and financial news, as Brent crude hits a new five and a half-year low of $48.55/barrel after Goldman Sachs revises its view of the oil markets.Goldman slashes oil forecastsBrent hits new post-2009 lowsRouble weakens again 10.39am GMT Greek government bonds are recovering this morning, after the country’s prime minister promised to ease the country’s austerity burden in an attempt to win votes.Antonis Samaras promised to cut taxes if he were returned to power after 25 January’s general election.“There won’t be any further pension and wage cuts,” “The next breakthrough in our growth plan includes tax cuts across the board which can happen gradually, step by step.”“The strategy of fear that the conservatives have campaigned on clearly hasn’t worked,” said Paschos Mandravelis, a prominent political commentator. “Greeks are not buying the theory that the opposition poses a danger, so now Samaras is altering course.”RT @MacroPolis_gr: ProRata for Paron SYRIZA 31 ND 25.5 KKE 5.5 Potami 5.5 G Dawn 4.5 PASOK 3 Ind Grks 2 Papandreou 1.5 Undecided 18 #GreeceRT @MacroPolis_gr: Interview poll: SYRIZA 29.5 ND 26 PASOK 5.5 Potami 5.5 G Dawn 5.5 KKE 4.5 Ind Gr 3 GPap 2.5 Other 4 Undec 8.5 #Greece 10.06am GMT Goldman Sachs even suggests that the oil price could potentially fall towards $30 per barrel, although this isn’t seen as likely (reminder, it expects Brent to average $50 this year)It says:“While history would suggest that a storage blow-out would push spot prices below $35, we believe that by avoiding breaching storage capacity, the market will hover around $40, potentially dipping at times into the high $30s which we see as the likely lows of this cycle.”. 9.55am GMT This chart shows how drastically Goldman Sachs has cut its oil forecasts:Goldman's 'New Oil Order.' (See what they did there? When's 'Oil Be Back'?) pic.twitter.com/nIG0pxGaTR 9.30am GMT Lamprell’s profit warning highlights the pressure building on Britain’s energy industry.Chancellor George Osborne has already dropped a strong hint that North Sea producers will get a new tax cut in March’s budget, declaring:“I don’t want to pre-empt the Budget but I can see that it may well involve further reducing the burden of tax on investment in the North Sea.” 9.17am GMT British oil rig maker Lamprell has issued a profit warning this morning after being hit by the turmoil in the sector.Lamprell, which makes various equipment including shallow-water drilling jackup rigs and land rigs, told the City it is struggling to win new business since crude prices began tumbling.“With the recent slump in the oil price, winning work in 2015 is going to be a challenge as the industry adjusts to the new realities. 9.10am GMT Shares in online electrical retailer AO World have jumped 8% after it rushed out its Christmas trading figures this morning. Online sales surged 38% in the last quarter, partly due to strong demand for Black Friday bargains. And UK technology and outsourcing group Quindell’s shares has surged by 25%, after it appointed an experienced new chairman, Richard Rose. 8.52am GMT Brent crude has fallen 3% today to $48.55 per barrel as traders digest Goldman Sachs’ new forecasts.That’s its lowest level since May 2009, extending the sharp selloff that began last autumn.Goldman Sachs said U.S. oil prices need to trade near $40 a barrel in the first half of this year to curb shale investments as it gave up on OPEC cutting output to balance the market.The bank cut its forecasts for global benchmark crude prices, predicting inventories will increase over the first half of this year, according to an e-mailed report. Excess storage and tanker capacity suggests the market can run a surplus far longer than it has in the past, said Goldman analysts including Jeffrey Currie in New York. 8.47am GMT European stock markets are gaining ground in early trading, with the FTSE 100 up 35 points, or 0.5%. 8.36am GMT One of Saudi Arabia’s richest businessmen has warned that oil prices will keep falling unless producers rein in supplies.Prince Alwaleed bin Talal told USA Today that:If supply stays where it is, and demand remains weak, you better believe it is gonna go down more. But if some supply is taken off the market, and there’s some growth in demand, prices may go up. But I’m sure we’re never going to see $100 anymore. I said a year ago, the price of oil above $100 is artificial. It’s not correct.I’m telling you, there’s no way Saudis will do this. Because Saudi Arabia is hurting as much as Russia, period. Now, we don’t show it because of our big reserves. But I’ll tell you Saudi Arabia and Russia are in bed together here. And both are being hurt simultaneously. 8.20am GMT The drop in the oil price is hurting the Russian rouble. It has fallen by 2.5% this morning to 62.8 roubles to the US dollar.The rouble is also vulnerable after Fitch downgraded Russia’s credit rating to BBB- on Friday night. 8.13am GMT Motorists in Birmingham should be celebrating the recent tumble in the oil price. “My customers have kept asking when we are going to drop the price to under £1 and when I looked at the figures I realised I could do it.“For me, it’s not about being greedy. As long as I make enough money to cover my overheads and give me a little bit of a profit then I am happy. 8.02am GMT Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.“To keep all capital sidelined and curtail investment in shale until the market has re-balanced, we believe prices need to stay lower for longer.“The search for a new equilibrium in oil markets continues.”GOLDMAN SACHS LOWERS 2015 BRENT PRICE FORECAST TO $50.40/BBL FROM $83.75; CUTS 2016 OUTLOOK TO $70/BBL FROM $90Oil down 1%. Gonna make for an interesting Monday for the markets pic.twitter.com/io0FHU4XLn Continue reading...
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