Oil prices fell for a third consecutive month in August as the combination of global monetary tightening to check rampant inflation and China’s ongoing zero-covid strategy put the brakes on demand, Bloomberg reports. The three-month slump in prices is the longest since the pandemic-era and breaks a months-long bull run in the global oil markets on the fallout from Russia’s invasion of Ukraine and tighter supply. Brent crude futures fell 8.6% during the month, ending yesterday’s trading session at USD 95 per barrel.

What’s the outlook on supply? OPEC+ has slashed in half its supply forecasts for this year as some of its members reduce production, according to Bloomberg. The alliance of oil producers now expects there to be a surplus of 400k barrels a day this year, and is forecasting a 300k bpd deficit next year after having previously predicted a 900k bpd surplus. The forecast will likely increase speculation that OPEC+ members could soon cut production to support prices, as the Saudi energy minister indicated last week.

The terrible economic and market data continue to roll in from Europe, the UK and the US:

• Say hello to the world’s newest emerging market: The GBP has suffered its biggest monthly fall since the Brexit vote in 2016 and is nearing record lows, while yields on government bonds saw their biggest monthly rise on record as investors head for the exits. (Bloomberg | FT)
• If anything, it’s worse in Europe: A Bloomberg index measuring corporate and investment-grade government bonds suffered its biggest monthly loss ever, losing 5.3% in August to Tuesday as fears about the energy crisis and rising interest rates grip the markets.. (FT)
• Prices just keep on rising: Preliminary data out yesterday showed eurozone inflation hitting a new record high of 9.1% in August, while Goldman Sachs now expects UK inflation to hit 22% next year. (Eurostat | The Guardian)
• Equity volatility is back stateside: The turbulent end to August on Wall Street continued in earnest yesterday as all three major stock indexes extended their recent run of losses to a fourth day. US stocks reversed all the gains made earlier in August to end the month almost 4% in the red. (Bloomberg)

THE CLOSING BELL-

The EGX30 fell 1.3% at yesterday’s close on turnover of EGP 1.49 bn (42.1% above the 90-day average). Foreign investors were net sellers. The index is down 16.3% YTD.

In the green: Mopco (+7.4%), Palm Hills Development (+3.1%) and Sidi Kerir Petchem (+0.8%).

In the red: Eastern Company (-6.1%), Madinet Nasr Housing (-3.6%) and CIB (-3.1%).

It’s red as far as the eye can see in Asia this morning. The Nikkei, Kospi and ASX are all down more than 1.5% while the Hang Seng is off almost 1% and shares in Shanghai have just clawed back earlier losses to rise 0.2%. Futures suggest major indexes in Western Europe, the US and Canada will follow suit at the opening bell later today.