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Limelight Remains On Oil As Saudi Arabia Resists Production Cuts
Singapore Market Commentary | 26 December 2014
By: Peter Ng
Articles (81) Profile

Amid an oversupply condition of oil driven by a historical high level of US oil production which was further exacerbated by members of the Organization of Petroleum Exporting Countries resisting to cut production, crude oil prices saw the largest annual decline since 2008.

However, words from Saudi Arabia’s oil minister has sparked optimism as he is confident that crude oil prices will rise in respect with the improving global economic growth and high-cost oil producers cutting back productions. Brent crude oil moved down 2.4% to US$60.24 on 25 Dec-14.

After extending a decline in excess of 25% against the US dollar during the past three months, the Russian ruble seemed to have found the floor as the US$/RUB pair closed at 52.29 on Christmas. This was mainly driven by a 650 basis points increase in the country’s interest rates and piling US$15.7 billion from the country’s international reserves to combat the ruble’s decline. While a victory flag could be pulled up for now, however, the continuity of problems evolving in Russia’s banking sector as well as the historical low oil prices, could drag the country into a recession as its finance ministry has made a downward revision of its gross domestic product next year.

In Asia, speculation of the Chinese government to take more aggressive measures to boost the economy, has led China stocks to continue its rally as the Shanghai Stock Exchange Composite Index closed 3.4% higher at 3,072.54 points on Christmas.

Despite the grim economic situation outside of Asia, back home, the Straits Times Index made way to push past and maintained above the 3,300 resistance this week.

Backed by a strong interest in investments, Peter's research spans across a range of industries, with his focus placed on companies listed on the SGX.

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