Monday, November 19, 2001
Equities quickly put Monday's tragic plane crash behind them and focused on the positive news from the Afghanistan warfront. Asian stocks regained vigor as U.S. retail sales rebounded from their dreadful September lows and gave investors hope that consumers are rebounding, which would mean more Asian exports to the United States. The pattern around the world stayed in place as international markets followed Wall Street. All indexes tracked here were up on the week with the Australian all ordinaries, South Korean Kospi and Mexican Bolsa extending their increases from the first of the year. Investors are looking ahead to recovery and not at the spate of mostly dismal economic U.S. and international indicators.
The Organization of Petroleum Exporting Countries (OPEC) met last week but was unable to agree on a production cut. The organization wanted nonmembers - especially Mexico, Norway and Russia - to agree on production cuts also. Russia, now the world's second largest producer, refused to go along. As a result, crude oil prices, which had spiked to around $29 immediately after the September terrorist attack, were down to a low of $17.45 on Thursday - a level not seen for two years. Some analysts think that a production agreement might be reached, but not until after the first of the year at the earliest. Cheaper oil will help control energy costs, which were at painfully high levels just a year ago, and may hasten the pace of economic recovery especially in the United States where consumers and businesses will have more money to spend elsewhere.
OPEC was aiming not only to shore up oil prices but also to regain some authority over the markets, which increasingly seem to doubt the cartel's muscle. Over the past few years OPEC quota alterations have had little effect as non-OPEC countries have increased production and profited from oil's prior price surge.
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On a clear day you can see the recovery
