Welcome to Friday. Here are the five things I'm looking at today on the Australian sharemarket.
- The S&P/ ASX 200 (Index: ^AXJO) (ASX: XJO) has opened 0.3% lower, driven by falls in energy stocks, as oil prices plunged overnight.Wall Street was closed overnight for thanksgiving, and our market doesn't seem to react well at the open when we have no leads from US markets.
- Australia's oil and gas companies are likely to be hit hard today, after oil prices crashed overnight.The Organisation of Petroleum Exporting Countries (OPEC) decided overnight not to curtail production, maintaining its collective output at a maximum of 30 million barrels of oil per day.
As a result Brent oil fell as much as US$6.50 per barrel, before trading at US$72.55 a barrel. WTI Crude Oil fell 6.3% to US$69.05, according to Bloomberg.
Stocks to watch include BHP Billiton Limited (ASX: BHP), which derives 23% of its earnings from petroleum products, Origin Energy Limited (ASX: ORG), Woodside Petroleum Limited (ASX WPL) and Santos Limited (ASX: STO).
- The partial good news is that iron ore prices rose 2.2% overnight to trade just below US$70 per tonne. But that's hardly a long term trend, and Australia's junior iron ore miners are still under incredible pressure.Mount Gibson Iron Limited (ASX: MGX) has requested its shares be suspended, not because of the falling iron ore price, but because of heavy flooding in its Koolan Island mine. That adds to the company's woes.
BC Iron Limited (ASX: BCI) yesterday announced that three of its directors were resigning, to cut costs. Included was founding managing director Mike Young. Will it be enough? Most likely not.
- Tweet of the Day
#Oil producer cost curve showing that US #shale is quite costly & leveraged to a (falling) oil price. $BPT pic.twitter.com/TheHwPJDSw
CalibreInvest (@CalibreInvest) October 10, 2014 - Stock of the Day – brought to you by Claude Walker – 1300 Smiles Limited (ASX: ONT). A dental business, 1300 Smiles has one of the best chief executives in charge, founder Darryl Holmes, and the company's annual addresses to shareholders are extremely forthright. Catch up on what Claude has to say about the company here.
