Salient to Investors:

  • Ed Morse at Citigroup said the lowest oil price in 4 years will provide as much as $1.1 trillion of stimulus to global economies by lowering the cost of fuels and other commodities, which are energy intensive to one degree or another.
  • Combined production from the US and Canada rose in 2013 to the highest since at least 1965.
  • Analysts expect the global economy to grow 2.98% in 2015, the fastest since 2010. Global inflation is expected to be 2.47%, euro-area inflation to be 0.5%, in 2014 .
  • Myrto Sokou at Sucden Financial said cheaper oil is an advantage for consumers and industrial and manufacturing operations, especially as winter approaches.
  • IEA said lower oil prices, for most economies, reduce the cost of doing business and support economic growth and offer a cushion against an otherwise vulnerable macroeconomic backdrop. IEA expects oil demand to grow at half the pace it expected in July.
  • Seth Kleinman at Citigroup said higher oil prices was always essentially a wealth transfer from leveraged spending US consumers to saving Middle East sovereigns, so ultimately reduced the global velocity of money significantly and was a net drag – this price fall reverses that.

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