Market Watch. UK labor market crisis

Financial and commodity markets analytics

Market Watch review. 16.12.2020

In today's release, we’ll cover the following topics:

  • Worsening forecasts for the oil market.
  • UK labor market crisis.
  • Industrial growth in the Eurozone. 

Global oil demand will be below initial estimates both at the end of this year and next year due to the second wave of the pandemic that swept across Europe and the United States. 
Such a forecast is given by the Organization of the Petroleum Exporting Countries in the December report on the state of the energy market.

The cartel, which controls a third of world oil production and almost half of its exports, worsens estimates of global consumption of raw materials for the third time since the beginning of autumn.

According to the new forecast, by the end of 2020, the decline in demand for "black gold" will amount to 9.77 million. In total, the world will need 89.99 million barrels per day - the minimum volume over the past 8 years. The forecast for 2021 is also worsened: next year, according to the calculations of the cartel, the world will consume 95.89 million barrels per day, recovering slightly more than half of the coronavirus failure.

The forecast for 2021 is overshadowed by "uncertainty around the effect of Covid-19 on fuel consumption", as well as, although to a lesser extent, meteorological forecasts that winter in the northern hemisphere will be "milder than usual", the document says.

Unemployment in the UK surged to its highest level in four years as the country prepares to face tougher travel restrictions in London and elsewhere that begin today.
The number of unemployed in the three months to October increased by 241 thousand people, as a result of which the unemployment rate was 4.9% (the highest rate since 2016).
Most regions of the UK will see the toughest restrictions imposed from Wednesday after a new strain of COVID-19 was linked to a faster rise in cases.

According to forecasts, this is not the limit - unemployment in the country will rise to 7.5%. Also, the recovery of the British economy is complicated by the potential exit from the EU without a deal.

Official data showed industrial production in the Eurozone continued to strengthen in October, despite a resurgence of Covid-19 cases across the continent.
According to Eurostat, industrial production in 19 Eurozone countries grew by 2.1% in October, with an annualized decline of -3.8%. 

This was a significant improvement from September when industrial production rose 0.1%. Growth continues for the sixth month in a row.

The situation in the European industrial sector continues to be in a recovery phase, as evidenced by the recent PMI statistics, on the other hand, the services sector in Europe is under pressure due to the introduction of repeated restrictions in many countries.

Closely monitor the news background and be prepared for all the surprises of the market.


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