The continued negativity in Oil prices was the biggest concern for global markets during Tuesdays session as the major indices in Europe and the US fell aggressively as the slide showed no signs of losing its momentum. It seems that whatever happens OPEC will not budge and yet again have reiterated their stance that the markets will undo this mess themselves and naturally regain some of its higher levels. However the WTI is testing out lows down at $37, an area that will be key in terms of support and in propping up the market for at least the short term. Oil prices have since rebounded somewhat off the lows of the day dragging the major indices with them. The rebound has actually seen the oil price end the European session in positive territory with Brent back above $41.
However with Brent now having breached the $40 level it leaves most investors and traders unsurprised, the only way oil rebounds is by WTI breaking $20 and having no choice but to rally or production being cut by OPEC and the shale producers, and for me only one of those things seems likely.
Earlier in the session Eurozone GDP printed bang in line with expectations with the reading for the quarter and year coming in at 0.3% and 1.6% respectively. The numbers are in line with what the market expected and what the ECB has already told us about growth in the Euro area.
Stocks have not only been hit by the lower oil price but also by the heavily weighted mining stocks after Anglo American (L:AAL) announced that they would not be paying a dividend to shareholders for the first time since the financial crisis back in 08/09. The diversification of the materials the company produces has been a source of worry for a lot of shareholders for a number of years and has now taken its toll on the bottom line.