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Falling world oil prices shatter Argentine stocks for second day running

Thursday, December 11th 2014 - 12:46 UTC
Full article 65 comments
The Merval stock index in Buenos Aires shed more than 600 points to 8,279.04, after losing 7.22% Tuesday. The Merval stock index in Buenos Aires shed more than 600 points to 8,279.04, after losing 7.22% Tuesday.

Argentine stocks closed down 6.85% Wednesday, weighted down by falling oil prices for a second day of heavy losses. As oil prices sank to new five-year lows, the Merval stock index in Buenos Aires shed more than 600 points to 8,279.04, after losing 7.22% Tuesday.

 State oil firm YPF and Brazil's Petrobras were among the top losers again, falling 7.48% and 8.11% respectively.

Electricity wholesaler Pampa Energia lost 8.40% and electricity distributor Transener lost 7.96%.

The bad news in Buenos Aires came as OPEC forecast that demand for the cartel's oil would fall to the lowest level since 2003 next year, but still showed no signs of cutting production.

That added to downward price pressure created by a supply glut fed in large part by booming production of shale oil in the United States.

The US benchmark West Texas Intermediate crude hit nearly 60 dollars a barrel Wednesday, down 40% from just six months ago.

Argentina is facing its own economic headaches, including a debt default, low foreign reserves and high inflation. The Cristina Fernandez administration is locked in a court battle with two US hedge funds fighting its plans to restructure the 100 billion debt it defaulted on in 2001.

Until the impasse is resolved, a federal court in New York has blocked Argentina from repaying creditors who had agreed to take steep losses on their bonds.

Inflation meanwhile stands at 21.4% for the period from January to October, according to the government, though independent analysts put the figure at 30 to 40%.

Stocks also slipped in other major Latin American economies: Brazil's stock market fell 1.29%; Mexico's lost 2.28%; and Chile's lost 1.32% -- the second straight day of losses for all three.

Categories: Economy, Energy & Oil, Argentina.

Top Comments

Disclaimer & comment rules
  • Englander

    World economy is in real trouble. Stock markets tumbling everywhere.
    Not being helped by German dominated Eurozone.
    Time to buy gold perhaps.

    Dec 11th, 2014 - 01:04 pm 0
  • Briton

    Will it reach $50 a barrel,
    The bad news in Buenos Aires ,

    but good news for the motorist...

    Dec 11th, 2014 - 01:42 pm 0
  • Giorgio C. Tsoukalos

    In other words, excellent news for Argentina. OPEC firesales oil, Russia MUST firesale oil, and Brazil and USA have tons of oil comming online at the WORST possible time and they will have to firesale it too.

    Argentina gets super cheap gas, CFK can balance her trade, and Argentina keeps VACA MUERTA, the other shales, and the likely off-shore oil for when everyone else runs out of oil and we can charge $2000 a barrel.

    Argentina is on the decline, but it will have one last hurrah! yet.

    Dec 11th, 2014 - 02:52 pm 0
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