Oil prices have slipped further, slipping below $76.5 dpb, eroding some of the gains from Friday’s session. The fall comes as investors digest the EIA’s statement last week that US petroleum consumption would slip 300,000 bpd this year to just over 20m bpd. The EIA also suggested that gasoline consumption would also fall 1% over the course of next year – representing the lowest per capita gasoline consumption in around 20 years. Demand for Saudia Arabian oil has also slipped from the world’s largest importer of crude oil, China, as markets continue to keep a close eye on the health of the second largest economy in the world.
On the supply side, Friday’s session saw oil prices rally following the Iraqi contingent of OPEC+ voting in favour of cuts. Despite the 2% rally, prices nonetheless remained 4% lower on the week, marking their third consecutive week of falling prices. On 7 November, the EIA wrote that “Ongoing OPEC+ production cuts will offset production growth from non-OPEC countries and help maintain a relatively balanced global oil market next year. Although the conflict between Israel and Hamas has not affected physical oil supply at this point, uncertainties surrounding the conflict and other global oil supply conditions could put upward pressure on crude oil prices in the coming months.” Their statement comes ahead of OPEC+’s meeting on 26 November which will see the group decide on supply side policies moving forward amongst geopolitical fragility in the Middle East. WTI crude futures are now down over 10% on the month, and around half a percent on the day.
This morning, the Rightmove House Price Index has indicated that property prices have slipped 1.3% on an annualised basis. On a monthly basis, housing prices slipped 1.7% marking the greatest average price reduction over a November since 2017. This figure equates to the average new seller asking prices falling £6,000 to £362,143. The number of sales being agreed has also fallen 10% since November 2019, indicative of the wider slowdown in the sector. This comes as the UK housing market adjusts to monetary conditions being at their tightest level since 2008 and the cost of living continues to impact the market. Herem Rightmove’s director of property science Tim Bannister, stated that despite the turbulent end to 2022, the year to date has been better than many expected. Asking prices have eased from the unsustainably frothy heights seen during the pandemic markets, where many sales went to best and final bids.”
Ofcom has today fined Royal Mail £5.6m for missing postal delivery targets which have caused “considerable harm” to customers. With the Royal Mail’s statutory target holding that 93% of Royal Mail’s first-class post is to be delivered on time, the 2022-23 financial year showed that this figure had fallen to as low as 74%. This came as postal workers completed 89% of delivery routes for each required day, far short of the 99.9% target. Such targets were put in place following the Royal Mail’s privatisation which commenced in 2013 and saw it fully privatised in 2015 finishing close to 500 years of state ownership. Royal Mail’s parent company, the FTSE 250 International Distributions Services, has slipped some 1% on the news.
Though this week starts a little light on primary data, tomorrow will see UK unemployment figures released. Last month UK unemployment fell marginally by 10bps to 4.2%, suggesting that the labour market may be holding up better-than-expected amid tighter monetary conditions. This comes ahead of UK inflation figures, released at 0700 on Wednesday and US retail sales later that day at 1330. Friday will also see the release of UK retail sales where the market will be looking to see whether any improvement can be made on last month’s figure which came in considerably lower-than-expected. Retail sales dropped 0.9% between August and September, missing forecasts of a more marginal 0.2% decline and marking the third contraction this year as households continue to contend with the rising cost of living.
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