What is going on with oil?
Prices have been in a relatively zippy mood the last few days, with a gain of over 20 per cent by the end of yesterday, as West Texas Intermediate touched $54. The price is down this morning—around $52.27—but that’s still a comfortable hit above $50. The price rally has been attributed to reports that U.S. rig count has slipped back to levels last seen almost 30 years ago, but it’s probably not just one factor pushing prices: After all, just a week ago, oil was at six-year lows after news that U.S. output had hit a weekly high not seen in more than 30 years. As we wait to see where oil will go today, have a look at Maclean’s A to Z of the oil crash. Here’s a hint for how it starts: “A is for Alberta . . .”
Today in economic news, there are numbers for Purchasing Manager’s Index (PMI), which measures the manufacturing sector from the eurozone and Japan. The Bank of England also begins a two-day monetary policy meeting, and keep an eye out for news from Iceland: The tiny country’s central bank will also make its interest-rate decision today.
Oil optimism gives a boost to the TSX and the loonie. Yesterday, the loonie rose more than a cent, putting it back above 80 cents, as the TSX/S&P Composite Index got another three-digit jump, albeit less than Monday’s.
Prices at the pump are rising. Meanwhile, gas prices for consumers have seen an uptick in the last week. Although they’re still far below last year’s prices, the last week has seen a 3.6 cent increase across Canada. The increase has been steeper in major cities: Calgarians have seen a 7.5 cent increase, while Vancouver has paid 6.7 cents a litre more than the week before. Meanwhile, your West Jet flight will not be getting cheaper: WestJet’s CEO told reporters, “Our plan is not to pass any of it on.” The airline hasn’t seen a drop in demand and, since they’re squeezed by oil prices when prices are high, he said this is an opportunity to shore up their bottom line.
Greece’s Grand Tour. The new Greek prime minister, Alexis Tsipras, and his finance minister, Yanis Varoufakis, are on a tour of Europe to meet with ministers and leaders to push a new economic plan that would exchange debt for bonds tied to the country’s economic growth. The government needs funding soon to keep access to its bailout, and the ECB so far is unwilling to approve the debt ceiling and issue the sale. A quarter of all Greeks are unemployed, while half of young Greeks don’t have work.
Greece’s bailout plan is getting almost as much attention as Varoufakis’s fashion choices, which included meeting the suited George Osborne, the U.K.’s chancellor, in a leather jacket, and the Italian prime minister’s gift to Tsipras of a tie. Sideshow or daring political manoeuvre? You decide.
Friends, rivals, frenemies? Google and Uber seem to be getting into each other’s turf lately. Google Ventures was a big investor in the ride-sharing service, but Bloomberg reported (from anonymous sources) that the tech giant is now developing its own ride-sharing application. In the meantime, Uber has started a collaboration with Carnegie Mellon University to develop driverless cars, which has long been one of Google’s pet projects.
Frozen profits heat up. If you’re Disney, that is. The company reported their earnings yesterday and, while there were gains across the business generally, a couple of Norwegian princesses turned out to be the real money-makers. Sales of Frozen products, everything from dolls to backpacks to you-name-it, were up by almost half from the previous year, pushing net profits to $2.18 billion in the last quarter. In the meantime, Disney is the latest company to weigh streaming services, as viewers decamp from cable. HBO is expected to launch a streaming service this year.
Need to Know:
TSX: 15,062.77 (+162.3), Tuesday
Loonie: 80.67 (+1.16 cents), Tuesday
Oil (WTI): $52.23, Wednesday morning (4 a.m.)