Sunday January 28, 2007

OPEC dumps $10.1 billion of treasuries as oil tumbles

bloomberg.com :

OPEC nations are unloading Treasuries at the fastest pace in more than three years as crude oil prices tumble, sending bond yields higher. Exporters including Indonesia, Saudi Arabia and Venezuela, sold 9.4%, or $10.1 billion, of their U.S. government debt securities in the three months ended in November. Oil producers have surpassed Asian central banks as the largest pool of global savings, accumulating an estimated $500 billion in 2006 alone, according to research by Pacific Investment Management Co.

OPEC members were selling Treasuries as crude prices declined 34% from a record high of $78.40 a barrel in July. They are reducing demand for U.S. government bonds at the same time as central banks from China to Romania say they want to cut holdings of dollar-denominated assets. For every $10 drop in the price of a barrel of oil, OPEC members adjust Treasury holdings by about $34 billion, according to estimates by Michael Pond, an interest-rate strategist in New York at Barclays Capital Inc.

Only Japan, China and the U.K. own more Treasuries than the 12-OPEC nations. China, the second-largest holder of U.S. debt, also is cutting back holdings. The central bank, which owned $346.5 billion of Treasuries as of November, trimmed purchases by 1.7% in the first 10 months of 2006, Treasury figures show. "The Chinese are slowing down their buying, so that leaves a big hole after the oil money," said Brenner at Hapoalim Securities.

(2007-01-28 15:27:46 SGT) [Biz] Permalink

Most popular blog postings on lowem.log :

1. Singapore SIBOR rate falls to 0.94% in Nov 2008, lowest since Jul 2004
2. Baltic Dry Index falls 93% as shipping rates plunge, signalling global economic collapse
3. Singapore SIBOR rate falls to 1.31%, lowest since Nov 2004
4. Singapore SIBOR interest rates fall to 1.5%, lowest since Dec 2004
5. Live spot gold price quotes chart on COMEX
6. 2010 Honda Civic Hybrid preliminary specifications released
7. Fuel prices seen stoking Malaysia inflation in 2008
8. How to insert currency exchange rates into Google Spreadsheets

Featured articles on lowem.log :

1. ABC Guide to Beating Inflation in Singapore and Elsewhere
2. Singapore inflation rate hits new 26-year high of 7.5% in Apr 2008
3. Baltic Dry Index falls 93% as shipping rates plunge, signalling global economic collapse
4. 67000 China factories closed in H1 2008 as global economic collapse takes hold
5. 2010 Honda Civic Hybrid preliminary specifications released
6. Peakoiler buys 2008 Honda Civic Hybrid FD3
7. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
8. Singapore SIBOR rate falls to 0.94% in Nov 2008, lowest since Jul 2004