Reuters - Iranian president blames oil price fall on political conspiracy

Iranian president blames oil price fall on political conspiracy

Dec 10 (Reuters) - Iranian President Hassan Rouhani has blamed unnamed countries of plotting to bring down crude prices and said the recent slump in oil prices was not based solely on economic factors.

With oil prices down more than 40 percent since June, Rouhani's administration has been scrambling for alternative sources of income. Iran's 2014 budget is based on oil at around $100 a barrel, while Brent crude is currently below $66 per barrel.

"The fall of the oil prices is not just something ordinary and economical, this is not due to only global recession," Rouhani told a cabinet session on Wednesday.

"The main reason for it is (a) political conspiracy by certain countries against the interest of the region and the Islamic world and it is only in the interest of some other countries."

Rouhani also said he had issued orders to his government to take measures to offset the effect of falling oil prices, without elaborating.

While some such as Iran and Venezuela have urged an output cut to support prices, the Organization of the Petroleum Exporting Countries (OPEC) decided in a meeting last month against reducing production.

Some Saudi Arabian officials have in recent months told private briefings that the kingdom was prepared to withstand depressed oil prices, possibly as low as $70 per barrel, for a prolonged period.

Such messages have sparked conspiracy theories, ranging from the Saudis seeking to curtail the U.S. oil boom, which needs high prices to remain profitable, to Riyadh looking to undermine Iran and Russia due to their support of Saudi's arch-enemy, Syrian President Bashar al-Assad.

Iran has in the past accused fellow Muslim countries in the region of plotting with the West to bring down oil prices as a tactic to undermine its sanctions-hit economy.

While Islamic hardliners in Iran have been quick to blame Saudi Arabia for the price falls, Rouhani and his moderate government have been careful not to antagonise the kingdom, a fellow OPEC member and regional rival, in the interest of better future ties.

Riyadh has said its oil policy is based on economic principles.

>>> FT blog suggests that leaked draft of EU summit communique seems to indicate

FT blog suggests that leaked draft of EU summit communique seems to indicate that Draghi will not get the usual political cover for a bold QE move next year 

Article:
Leaked EU summit conclusions: Draghi left hanging?

The dance had become so routine that we at the Brussels Blog were thinking of giving it a name, the Eurozone Two-Step.

Ever since the eurozone crisis first rocked international markets nearly five years ago, European Central Bank chiefs – first Jean-Claude Trichet, then Mario Draghi – sent a very clear message to the currency union’s political leaders: we can only act if you act first.

The deal was never explicit, but both sides knew what was required. The ECB’s first sovereign bond purchase programme in May 2010 came only after eurozone leaders created a new €440bn bailout fund; its €1tn in cheap loans to eurozone banks in early 2012 only came after political leaders agreed to a new “fiscal compact” of tough budget rules.

But with the markets watching Frankfurt closely for signs Draghi is about to launch another bold move – US-style quantitative easing, purchasing sovereign bonds to halt fears the bloc is headed into a deflationary spiral – there are new indications one of the partners is no longer dancing.

Back in October at a eurozone summit, Draghi was able to get a little-noticed statement out of the assembled leaders committing them to another “Four Presidents Report”, a reference to the blueprint delivered in 2012 that set a path towards further centralisation of eurozone economic policy. The report helped kick-start the EU’s just-completed “banking union.”

Progress on that 2012 blueprint has since stalled, however, and at his last summit press conference, then-European Council president Herman Van Rompuy said the new “Four Presidents Report” would be delivered at the December EU summit, which starts next Thursday. Many in Brussels saw this as the quid for Draghi’s quo – once the leaders agreed to another blueprint for eurozone integration, Draghi would have a free hand to launch QE.

But according to a leaked draft of the communiqué for next week’s summit, Draghi may have to deliver his quo without a eurozone quid. The text (which we’ve posted here) makes clear that leaders have no intention of delivering a new blueprint any time soon.

According to the draft, a debate on how to proceed will be pushed off until February, and the report itself will come no sooner than June. Here’s the relevant paragraph from the current draft, sent around to national capitals on Monday:

Closer coordination of economic policies is essential to ensure the smooth functioning of Economic and Monetary Union. Work on the development of concrete mechanisms for stronger economic policy coordination, convergence and solidarity is being taken forward. Heads of State or Government will exchange views on these matters at their informal meeting in February. The President of the Commission, in close cooperation with the President of the Euro Summit, the President of the Eurogroup and the President of the European Central Bank, will report at the latest to the June 2015 European Council.

This means Draghi won’t have the normal political cover he needs to make a bold decision early next year – a problem only compounded by the European Commission’s decision last month to put off the day of reckoning for France and Italy over whether they will face sanctions for failing to live up to the EU’s crisis-era budget rules.

Does that mean Draghi can’t act? Hardly. But with opposition to QE rising both within Germany and the ECB governing council, it certainly makes it politically more difficult for the normally persuasive Italian.

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: SEV +14%, ALOG +7.8%, KFY +2.9%, (also adopted a dividend policy), HQY +1.6%, COST +0.5%, FSFR +0.5%, TSM +0.4%, (monthly revs)

Select Airline related names showing strength (a few peers upgraded today) : LUV +1.6%, DAL +1.5%, VA +0.4%

Select metals/mining stocks trading higher: GOLD +1.8%, GFI +1.3%, ANV +1.1%, VALE +0.5%

Other news: CYRN +24.7% (announced that Bangcle will deploy CYREN's embedded technology to protect mobile applications against today's latest threats.), SEV +14% (selected to provide motor controllers for new hybrid electric 4-door sedan), JRJC +3% (Shanghai rebounded nearly 3% overnight), LULU +2.3% (still checking, report earnings tomorrow), APAM +1.4% (reported November 30,2 014 AUM of $109.5 bln), AUY +1.2% (Provides an update on strategic initiatives relating to non-core assets; company has made significant progress), YOKU +0.8% (Shanghai rebounded nearly 3% overnight)

Analyst comments: SNSS +10% (upgraded to Buy from Hold at Cantor Fitzgerald), BKW +2.4% (upgraded to Outperform at RBC Capital Mkts), AAL +1.9% (upgraded to Overweight from Equal Weight at Barclays ), SGI +1.8% (upgraded to Buy from Hold at Needham), UAL +1.7% (upgraded to Overweight from Underweight at Barclays), BMS +0.6% (upgraded to Outperform from Market Perform at BMO Capital Markets)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: TITN -8.9%, FRPT -5.9%, KKD -5.3%, YUM -4.7%, (sees FY15 adjusted EPS growth of at least 10% (vs Capital IQ Consensus Estimate of approx +17.3%), BRCM -1.2%, NCS -1.2%, IMOS -0.9% (Nov revs and Q4 guidance), GPT -0.7%, (also agreed to acquire a portfolio of 12 single-tenant net lease assets from Dividend Capital Diversified Property Fund for ~ $399 mln; announces public offering of 45 mln shares of common stock, LE -0.7%, PHX -0.6%, TOL -0.5%

Select oil/gas related names showing early weakness: LINE -3.2%, SDRL -2.5%, HAL -1.8%, STO -1.6%, CNX -1.4%, RIG -1.3%, SLB -1.3%, BHI -1.3%, COP -1.2%, PBR -1%

Other news: PLG -11.2% (discontinues 150,000 unit offering of senior unsecured notes and common share purchase warrants; executes term sheet; announces us$110 million bought deal financing), GDP -9.5% (announced a preliminary capital expenditure budget for 2015 of $150 -- 200 mln; authorized management to explore strategic alternatives for all or a portion of the Company's Eagle Ford Shale asset), CMTL -8.9% ( completes review of strategic alternatives; Co to remain independent), TPLM -7.3% (following 40%+ move higher yesterday), IG -5.2% (announces proposed offering of $125 million of convertible senior notes due 2019), NBG -4.3% (Athens stock index falls another 2% overnight), NQ -3.6% (still checking), NAO -3.3% (Nordic American Tanker (NAT) increases ownership in NAO to 19.2%), CVEO -2% (to be replaced in the S&P MidCap 400 by KLX Inc.), GME -1.9% (negative commentary on Tuesday's Mad Money), GSK -1.8% (still checking), AGIO -1.4% (files mixed securities shelf offering; is offering to sell up to $175 mln of its common stock), OAS -1.3% (continues to anticipate producing between 47-49K barrels of oil equivalent per day in Q4 of 2014), KITE -1.3% (filed amended S-1 for sale of 3 mln shares of common stock), BP -0.8% (presents Upstream strategy to investors; expects $1 billion in Group-wide restructuring charges over coming year)

Analyst comments: ALLT -5.6% (downgraded to Underperform from Buy at BofA/Merrill), DDD -1.6% (initiated with an Underperform at Longbow), RDS.A -1.1% (downgraded to Hold from Buy at Deutsche Bank), RCL -1% (downgraded to Sell at Danske Bank, downgraded to Neutral from Buy at Swedbank), SHOO -0.8% (downgraded to Neutral from Buy at Goldman), GS -0.7% (downgraded to Neutral from Positive at Susquehanna), DIS -0.5% (downgraded to Hold from Buy at Topeka Capital Markets).

>>> US Early premarket gappers

Early premarket gappers
Gapping up: SNSS +14.7%, OXGN +14.3%, SEV +14%, SEV +14%, ALOG +7.8%, AUY +7.2%, AUY +7.2%, KFY +2.9%, ANV +1.6%, HQY +1.6%, APAM +1.4%, APAM +1.4%, GFI +1.3%, TSL +1%, GOLD +1%, COST +1%, BLUE +0.9%, VALE +0.8%, TOL +0.6%

Gapping down: FRPT -9.7%, IG -5.2%, KKD -5.1%, YUM -4.4%, CMTL -3.9%, GDP -3.9%, TPLM -3.7%, SDRL -3%, ALLT -2.3%, CVEO -2%, NBG -1.9%, RIG -1.5%, AGIO -1.4%, STO -1.4%, GSK -1.4%, RDS.A -1.3%, HAL -1.3%, OAS -1.3%, BRX -1.2%, RCL -1.2%, MS -1.2%, SNN -1.2%, NCS -1.2%, COP -1%, BP -1%, BHP -0.9%, IMOS -0.9%

>>> Goldman Sachs forecast UK GDP growth will fall to 2.8% y/y in 2015 from 3.0%

Goldman Sachs forecast UK GDP growth will fall to 2.8% y/y in 2015 from 3.0% y/y in 2014 (slightly above consensus of 2.6%) and see inflation dropping to around +0.8% y/y in "coming months", but see it rising gradually over the rest of the year. "We continue to forecast that growth will be stronger than consensus expectations but that inflation will nevertheless be weaker than consensus expects; we continue to be relatively optimistic regarding the prospects for potential output in the UK; and we continue to expect that demand and supply will both be supported by an ongoing recuperation of the UK's banking system," Goldman say.