After staging multiple unsuccessful rallies since summer began, oil bulls have been defeated again, with front-month futures contracts for West Texas Intermediate crude dropping below $45 a barrel again this morning, within reach of low levels for the year. Comments from officials departing a meeting of Gulf State oil administrators roiled energy markets this morning as regional media outlets reported that Saudi Arabia rejected calls by Venezuela and other weakened OPEC states for a production summit. With this weeks Energy Information Administration numbers showing a sharper rise in U.S. crude stockpiles than anticipated and a pledge from Russias energy ministry to make no cuts in production, a global supply glut now seems likely to persist for oil inventories. With hope fading for a speedy recovery of growth momentum in developing economies, the glass-half-empty argument for oil prices appears increasingly convincing on both the demand and supply side of global energy markets. The longer-term view may be very different, with the International Energy Agency predicting today that persistent low prices will cause U.S. shale production to be curbed dramatically in 2016, helping prices find their footing.
China to prosecute senior executives. The Central Commission for Discipline Inspection today announced that the former chairman and vice chairman of state-owned enterprise China Resources Holding will be prosecuted for corruption as part of Chinas ongoing wave of anti-graft investigations. Song Lin stepped down as chairman of the firm last year after first coming under scrutiny.
S&P cuts Petrobras to junk. One day after lowering Brazils sovereign rating below investment grade levels, Standard & Poors Thursday reduced its rating for bonds issued by Petrobras two levels to BB. This latest blow to the state-controlled firm comes as low oil prices and a massive political corruption scandal have already left the company reeling.
More merger talks in Swiss pharmaceutical sector. Allschwil, Switzerland-headquartered drug company Actelion today announced that it has begun strategic discussions with Coppell, Texas-based biotech ZS Pharma. Last month reports surfaced that ZS executives were considering a $2.5 buyout offer from Allschwil.
Danish telecom merger scuttled. The planned merger of the Danish telecom franchises of TeliaSonera and Telenor was canceled today after EU Competition Commissioner Margrethe Vestager came out against the combination. With several major European market mergers within the industry currently under consideration or in progress, a signal that the EUs anti-competition watchdog may take a dim view sent stocks from the sector lower in trading.