close
MENU
2 mins to read

While you were sleeping: UPDATED Wall Street plunges on oil glut report

OPEC is predicting oil production from outside the group will rise in 2017.

Margreet Dietz
Wed, 14 Sep 2016

Wall Street dropped with the price of oil after reports from OPEC and the International Energy Association showed the global glut won't abate any time soon.

Global oil demand growth is slowing at a faster pace than initially predicted, the IEA says in its latest oil market review.

"Our forecast in this month's report suggests this supply-demand dynamic may not change significantly in the coming months. As a result, supply will continue to outpace demand at least through the first half of next year," the IEA says.

"With our more pessimistic outlook for the second half of 2016 refining activity and revisions to crude supply, the expected draws in the third quarter of 2016 are now lower, while the build in the fourth quarter of 2016 is higher."

Meanwhile, OPEC now predicts production from outside the group will rise in 2017, compared with a previous estimate for a decline, mainly due to new production from Kashagan.

Crude fell 3% to $US44.90 a barrel in New York.

Dow drops 258 points
At the Wall Street close, the Dow Jones Industrial Average plunged 258.32 points, or 1.5%, to 18,066.75, while the Nasdaq Composite Index shed 1.% to 5155.25. The Standard & Poor's 500 Index dropped 1.5% to 2127.02.

Declines in Chevron and American Express shares, down 2.9% and 2.7% respectively, led the drop in the Dow. Apple shares bucked the trend, trading 2.4% higher. Exxon Mobil shares also moved lower.

Monsanto's board is set to meet on Tuesday to decide whether to approve a sale to Germany's Bayer for more than $US65 billion after concluding more than four months of negotiations, Reuters reports, citing people familiar with the matter.

The deal is expected to value Monsanto, the world's largest seeds firm, at more than the sweetened $US127.50 per share cash offer the German pharmaceuticals and crop chemicals maker disclosed last week, but less than the $US130 per share that Monsanto was hoping for.

Bayer's supervisory board is due to follow suit and meet on Wednesday to deliberate on Monsanto's response, the sources told Reuters, adding it was still possible the deal could hit a snag with the board of either company.

Monsanto shares traded 0.9% lower while Bayer’s closed 1.2% lower in Frankfurt.

In Europe, the Stoxx 600 Index finished the day with a decline of 1% from the previous close. Germany's DAX index retreated 0.4%, the UK's FTSE 100 Index fell 1.1%, while France's CAC 40 index slid 1.2%.

(BusinessDesk)

 

Margreet Dietz
Wed, 14 Sep 2016
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
While you were sleeping: UPDATED Wall Street plunges on oil glut report
61599
false