Oil dropped after Iraqi crude production surged to a record and the International Monetary Fund cut its global growth outlook.

Crude fell as much as 5.1 percent in New York and 2.2 percent in London. Iraq is pumping 4 million barrels a day and will boost exports, Oil Minister Adel Abdul Mahdi said at a news conference in Baghdad. The IMF made the steepest reduction to its global-growth outlook since January 2012 in its quarterly global outlook yesterday. Projections for the euro area, Japan, China and Latin America were trimmed.

Oil slid more than 50 percent since June as the U.S. pumped at the fastest pace in more than three decades and the Organization of Petroleum Exporting Countries resisted calls to reduce production. Goldman Sachs Group Inc. and Societe Generale SA were among banks to reduce their price forecasts last week.

"We continue to get news of rising supplies and a shaky economy." John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. "The surge in Iraqi production is going to add barrels to an oversupplied market. The IMF report was lousy and further crimps the demand outlook."

WTI for February delivery, which expires today, decreased $2.05, or 4.2 percent, to $46.64 a barrel at 10:46 a.m. on the New York Mercantile Exchange. The more active March contract slipped $2.03 to $47.10. WTI fell to $44.20 on Jan. 13, the lowest level since April 2009. The volume of all futures traded 72 percent above the 100-day average for the time of day.

Brent for March settlement fell 38 cents, or 0.8 percent, to $48.46 a barrel on the London-based ICE Futures Europe exchange, following a 2.7 percent drop yesterday. Volume for all futures traded was 2 percent higher than the 100-day average. The European benchmark crude traded at a $1.36 premium to the March WTI contract.

Gold prices traded higher on Tuesday. Spot gold rose to $1,293.80 a troy ounce in morning European trade. Gold price increased due to concerns over global economy. The International Monetary Fund (IMF) cut its forecasts for global growth. It expects the world economy to expand 3.5% in 2015, down from an earlier projected 3.8% rise, and 3.7% in 2016, down from an earlier projected 4.0% gain.

Gold also benefited from the Swiss National Bank's decision to discontinue the 1.20 per euro exchange rate floor.

Gold is expected to trade higher ahead of the European Central Bank (ECB) policy meeting on Thursday and parliament elections in Greece on Sunday.

Analysts expect that the ECB President Mario Draghi will announce on Thursday a 550 billion-euro bond-buying programme.

There is also speculation that Greece could leave the Eurozone. If a left-wing government wins Greek parliament elections, it may cancel austerity measures and may renegotiate Greece's debt.

Bloomberg

HSBC Cuts GDP Outlook for 13 Oil Exporters as Price Plunges

The plunge in oil prices prompted HSBC Holdings Plc (HSBA) to cut this year's economic outlook for 13 crude exporters across central, eastern Europe and the Middle East, while singling out Turkey as the biggest winner from the slump.

Source: http://www.bloomberg.com/news/2015-01-19/hsbc-cuts-gdp-outlook-for-13-oil-exporters-from-russia-to-u-a-e.html

Reuters

Europe shares follow Asia higher on China growth relief

(Reuters) - Shares in Europe and Asia rose on Tuesday and the dollar strengthened after China said its economy had not slowed as much as many in markets had feared.

However, the International Monetary Fund cut its forecast for global growth in 2015 by three-tenths of a percent to 3.5 percent and called on governments and central banks to pursue accommodative monetary policies and reforms.

Source: http://www.reuters.com/article/2015/01/20/us-markets-global-idUSKBN0KR10W20150120

The New York Times

On to Plan B as Oil Work Stalls in Texas

MIDLAND, Tex. - With oil prices plummeting by more than 50 percent since June, the gleeful mood of recent years has turned glum here in West Texas as the frenzy of shale oil drilling has come to a screeching halt.

Every day, oil companies are decommissioning rigs and announcing layoffs. Small companies that lease equipment have fallen behind in their payments.

Source: http://www.nytimes.com/2015/01/20/business/energy-environment/in-texas-hunkering-down-for-the-oil-bust.html?_r=0

(raw materials / closing price /% change)

Light Crude 48.69 +5.28%

Gold 1,276.90 +0.96%