Archive for February, 2015

The Global Economy in February

Greece debt negotiations took the spotlight in the otherwise uneventful month of February as the European Union and Greece authorities struggled to come into an agreement over Greece’s bailout program. The discussions ended positively with both parties agreeing on a four-month extension to the existing bailout deal which was set to be expired by the end of February, helping Greece avoid a possible crash crunch. The European Commission confirmed the granting of the extension after reviewing and accepting the economic reforms proposed by Greece.

On the geopolitical front the leaders of Germany, France, Russia, and Ukraine agreed on a ceasefire deal to end fighting in eastern Ukraine. However, the agreement has failed to take effect so far and with ongoing civil unrest it remains to be uncertain whether the agreement would materialize anytime soon. On a more positive note, taking pressure off the country’s economic woes, the IMF granted Ukraine with a $40 billion funding package.

Crude prices found support during the month as the number of active drilling rigs in the US continued to fall. Furthermore, reports showed a significant fall in Libyan oil production following a pipeline explosion which took place due to terrorist attacks. Nevertheless, several OPEC producers including Saudi Arabia were seen reducing prices for Asian buyers as part of their strategy to defend market share.