Greek Deal Not Yet Finallized

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Athens Acropolis, Greece

Greek and United Nations flags flutter atop the Athens Acropolis on United Nations Day in Athens.


Financial markets gained support by the ceasefire between Israel & Hamas despite the non-event of the EU finance minister meeting. US economic data was disappointing with consumer confidence downwardly revised in November. The BOE’s minutes showed that policymakers were split on increasing the size of the asset purchase program. Wall Street gained with the DJIA and the S&P 500 climbing +0.38% and +0.23% respectively. In the commodity sector, the front-month contract for WTI crude rose +0.73% while the equivalent Brent crude contract added +0.94%.

In the Eurozone, the EU/IMF/ECB troika retained the view that Greece’s debt will only fall to 144% of GDP by 2020, 133% in 2022 and 111% in 2030. According to a document prepared for the EU meeting, Greece has to carry out a number of measures to lower the ratio to below 120% of 2020. For instance reducing interest rates on bilateral loans to Greece by -70 bps current from 150 bps above financing costs would reduce debt -1.4% of GDP by 2020 whereas a cut to 25bpd would lower the debt by -5.1% of GDP by 2020. Deferring interest payments by 10 years to 2022 on loans made through the Eurozone's bailout would cut Greek debt by 43.8B euro, or 16.9% of GDP. The ECB might return the profits it made on its Greek bond portfolio so that Greek debt would decrease -4.6%. Meanwhile, buying back 10B euro worth of Greek bonds from private investors at 50 cents/euro shrink the debt by -2.4% of GDP by 2020.

The BOE’s minutes for the November meeting showed that policymakers unanimously voted to leave the Bank rate unchanged at 0.5% but were divided (8-1) in keeping the asset purchase program unchanged at 375B pound. David Miles favored increasing asset buying by +25B pound to 400B pound. The central bank's decision was also affected by the Treasury's decision to transfer gilt coupon earned from the asset purchase program to the Exchequer. The BOE deemed that the arrangement implies 'a small easing in monetary conditions'.

The DOE/EIA reported that total crude oil and petroleum products stocks slipped -6.21 mmb to 1088.04 mmb in the week ended November 16. Crude stockpile decreased -1.47 mmb to 374.47 mmb as stockpiles rose in 4 out of 5 PADDs. Cushing stock added +1.47 mmb to 45.15 mmb. Utilization rate was up +1.5% to 87.5%.

Gasoline inventory slipped -1.55 mmb to 200.39 mmb although demand fell -0.11% to 8.90M bpd. Production added +0.94% to 9.19M bpd while imports soared +3.01% to 0.62M bpd. Distillate inventory plunged -2.68 mmb to 112.84 mmb as demand rose 2.31% to 4.20M bpd. Imports slid -12.0% to 0.18M bpd while production gained +2.31% to 4.20M bpd during the week.

Weekly change in inventory as of 16/11/12 ActualChangeConsensusPrevious Crude oil 374.47 mmb-1.47 mmb-1.75 mmb+1.09mmbGasoline 200.39 mmb-1.55 mmb-0.50 mmb-0.44 mmbDistillate 112.84 mmb-2.68 mmb-1.40 mmb-2.54 mmb

Comparison between API and EIA reports:

  API (Nov 16)   EIA (Nov 16)  ActualInventoryPrevious Forecast (using API's inventory level)InventoryCrude oil-1.92 mmb371.12 mmb+1.35 mmb -4.81 mmb372 mmbGasoline-4.81 mmb196.04 mmb-0.10 mmb 

-5.90 mmb

196 mmbDistillate-4.40 mmb

114.14 mmb

+0.18 mmb -1.38 mmb1148 mmb


Oil and Gold Reports contributed by Oil N' Gold

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