- U.K. Factories on Best Run Since 1997 Amid Global Upswing
U.K. manufacturers posted a seventh consecutive month of expansion in November as sectors from food producers to makers of games and sports equipment increased output.
Factory output rose 0.4 percent from October, the Office for National Statistics said Wednesday, while overall industrial production also increased 0.4 percent, with a drop in temperatures boosting demand for energy. That means the sector, which accounts for 14 percent of the economy, almost certainly contributed to growth in the final quarter of 2017.
Stronger manufacturing was one of the factors cited by the National Institute of Economic and Social Research as it upped its fourth-quarter growth estimate to 0.6 percent in a report Wednesday. That would be the fastest rate in a year.
Factories are enjoying the longest run of uninterrupted growth since 1997 thanks to a broad-based global upswing, particularly in the euro area, which buys almost half of British exports. Ten out of 13 manufacturing sectors posted increases in November. A weak spot was car production, which plunged by 7.1 percent — the biggest decline since 2014 — after strong foreign demand in recent months.
Separate figures show construction output climbed 0.4 percent in November, and the trade deficit widened to 2.8 billion pounds.
The construction sector appears on course to shrink for a third straight quarter after a 1.1 percent decline in October, leaving industry executives pinning their hopes on budget initiatives announced by Chancellor of the Exchequer Philip Hammond to boost homebuilding and get young people onto the property ladder.
The economy’s performance in 2018 will depend on the dominant services industry, which has come under pressure from inflation-squeezed consumers. Britain is forecast to join Italy and Japan at the bottom of the Group of Seven growth league this year, with an expansion of just 1.4 percent, Bloomberg surveys show.
The trade figures show exports of goods and services rose by 0.6 percent and imports gained 1.6 percent. While export volumes have far outstripped imports over the past year, higher import prices caused by the pound’s past depreciation are making it hard to reduce the deficit.
The goods shortfall excluding oil and erratic items stood at 32.7 billion pounds in the three months through November, just 1.5 billion pounds lower than a year earlier.
Net trade contributed nothing to GDP growth in the third quarter, and may fail to do so again in the fourth. The total deficit will widen unless December sees the shortfall narrow sharply to 763 million pounds.
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.
OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.
Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”
Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.
Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.
Experts have started predicting $75 a barrel by April.
“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”
Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin
Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges
Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.
The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.
The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.
“We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.
Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.
Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.
In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.
The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.
Oil Prices Extend Gains to $64.32 Ahead of OPEC+ Meeting
Oil Prices Rise to $64.32 Amid Expected Output Extension
Oil prices extended gains during the early hours of Thursday trading session amid the possibility that OPEC+ producers might not increase output at a key meeting scheduled for later in the day and the drop in U.S refining.
Brent crude oil, against which Nigeria oil is priced, gained 0.4 percent or 27 cents to $64.32 per barrel as at 7:32 am Nigerian time on Thursday. While the U.S West Texas Intermediate gained 19 cents or 0.3 percent to $61.47 a barrel.
“Prices hinge on Russia’s and Saudi Arabia’s preference to add more crude oil production,” said Stephen Innes, global market strategist at Axi. “Perhaps more interesting is the lack of U.S. shale response to the higher crude oil prices, which is favourable for higher prices.”
The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, are looking to extend production cuts into April against expected output increase due to the fragile state of the global oil market.
Oil traders and businesses had been expecting the oil cartel to ease production by around 500,000 barrels per day since January 2021 but because of the coronavirus risk and rising global uncertainties, OPEC+ was forced to role-over production cuts until March. Experts now expect that this could be extended to April given the global situation.
“OPEC+ is currently meeting to discuss its current supply agreement. This raised the spectre of a rollover in supply cuts, which also buoyed the market,” ANZ said in a report.
Meanwhile, U.S crude oil inventories rose by more than a record 21 million barrels last week as refining plunged to a record-low amid Texas weather that knocked out power from homes.
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