Global equities endured another tough month in September, sinking to levels last seen in late 2020. Sentiment became weaker as markets were trying to stomach aggressive interest rate hikes, as central banks attempt to rein in inflation that has remained stubbornly at a high level, despite slowing growth.
Since June, oil prices have been decreasing for four straight months. This can be attributed to rising interest rates; a surging dollar; and decreasing energy demand due to Covid-19 lockdowns in power-house China.
Sources have it that the Organisation of Petroleum Export Countries (OPEC) and its allies are considering a production cut of more than one million barrel per day (bpd) ahead of Wednesday’s meeting. This news resulted in an increase in the price of oil since markets opened for today’s trading (3 October).
Locally, the price of 95 unleaded petrol is expected to fall by around R1.02 a litre on Wednesday. However, diesel is on track for a small price hike.
Looking at the week ahead; On a data front: Figures from the US Institute for Supply Management (ISM) and manufacturing Purchasing Managers’ Index (PMI) will be released, as well as those of the UK, eurozone, France, and German PMI. Markets will also keep an eye on developments in the elections in Brazil where the country could see a switch from a far-right (Pres Jair Bolsonaro) to a left-wing leader (ex-President Luiz Inácio Lula da Silva).