Here’s our report on the Opec meeting stalemate:

Lingering hopes that Saudi Arabia and Iran could put aside their regional power struggle and reach a deal on oil production levels to help stabilise the volatile crude markets have been dashed.

A ministerial meeting of the Opec oil-producing cartel broke up in Vienna without agreement on Thursday, with Tehran refusing to support a plan by Riyadh and others to freeze their crude output.

The political logjam means the “fragile five” Opec members such as Nigeria, Venezuela, and Libya whose economies are almost completely dependent on petroleum revenues, will remain under pressure.

The UK North Sea industry could see more layoffs and spending cuts but a lower oil price – currently just below $50 per barrel compared with the $100 level hit in the years prior to 2014 – is good for British motorists, manufacturers and homeowners.

Opec put a brave face on its inaction, pointing out that the cost of crude had risen by 80% since its last summit in December. It said it had achieved the main purpose of the meeting, choosing a new secretary general, in Nigeria’s Mohammed Barkindo.

The full story is here:

Back with Greece and the European Central Bank, and the prospect of reintroducing a waiver allowing the Bank to buy the country’s bonds:

There was talk of country quotas following the Opec meeting but.....

Back with oil, and after a surprise build up of stocks reported on Wednesday by the American Petroleum Institute, there was a fall in inventories according to the latest weekly Energy Information Administration.

EIA figures showed US crude stocks fell by 1.37m barrels, and despite being lower than the forecast 2.5m barrel draw, the news has given some support to oil prices which were hit by the earlier lack of agreement by Opec.

Brent crude, having fallen as low as $48.84 a barrel is now down 0.6% at $49.40.

Earlier of course there were also some US jobs figures, ahead of the non-farm payroll numbers on Friday. The ADP private sector payroll number came in exactly in line with forecasts, but ING Bank warns not to read too much into that as far as the non-farms are concerned. ING economist James Smith said:

Although ADP’s estimate of employment remained below 200,000 in May, we would caution against relying on it too heavily as a guide for tomorrow’s labour report.

In advance of this week’s hotly-anticipated labour report, ADP’s estimate of May’s private payrolls came in (rather magically) exactly on consensus at 173,000. This figure may not have been adjusted for the Verizon strike, which the Bureau of Labor Statistics has already said will remove approximately 35,000 workers from May’s overall employment and this in principal, supports the view that non-farm payrolls (NFP) will come in below 200,000 again tomorrow.

However, we would note that, whilst ADP use information from their client’s payrolls, this is only one (possibly relatively small) part of the overall forecasting model that they employ. It is also a function of last month’s official payrolls data (ie an autoregressive model) and a business conditions index (which is composed of activity data such as industrial production and GDP). As a result, we would caution against relying too heavily on this estimate of NFP, as the information specifically contained about May’s labour market performance may be fairly limited.

Despite the strike-related distortion, we feel that Friday’s consensus figure is a little low.

Although it is possible that job creation is slowing as the economy reaches something close to full employment, the high month-on-month volatility (arising from several factors, not least statistical/seasonal adjustment gyrations) in NFP means that the risk of a higher reading than last month (160,000) is arguably greater than the risk of a lower one. We look for something at or above what we consider to be the current underlying trend (roughly 180,000-185,000).

That said, we feel that the key to the next Federal Reserve Open Market Committee rate hike does not lie within the labour report. As recent speeches/statements have shown, the Fed’s labour market check-box is effectively already “ticked” and thus the timing of the next move depends more on how FOMC members perceive the recovery in activity data to have been since a weak first quarter.

In that regard, the final (and probably definitive) green or red light to a June hike will come from Chair Yellen’s speech on Monday. On balance, although many of the FOMC’s conditions for a hike have arguably been largely met, we feel that they are more likely to wait until the third quarter (most likely July), when the UK referendum event risk has passed.

It’s been a busy couple of hours, what with the European Central Bank and the collapse of BHS. And of course Opec.

On the outcome of the oil producers’ meeting, chief market analyst at FXTM Jameel Ahmad said:

There was never a chance that Opec would cut production today, meaning there are no real surprises from the outcome of this meeting resulting in OPEC failing to reach an output deal.

While the oil markets are finding themselves under pressure and encountering selling momentum as a result of the announcement, it is important to point out that the oil markets have been meeting sellers around $50 now for the past fortnight and this is currently seen as a “top” for the commodity.

To put it quite simply, there was very little need for Opec to change their strategy today and it is important to point out that the price of oil has rebounded substantially since the milestone lows below $30 at the beginning of 2016.

There are also reports that major institutions such as Opec and the IEA are expecting a dramatic decline in global inventories over the second half of 2016, which would be very supportive and positive to the chances of a further comeback in the price of oil for the remainder of the year.

Ranko Berich, Head of Market Analysis at Monex Europe, agrees that today’s ECB press conference wasn’t a hummdinger:

“Very little was added to the mix during today’s press conference apart from a start date for corporate bond purchases*. The bottom line is that the outlook for inflation remains grim, but the ECB is not likely to act until it has no other choice, due to vague hopes of energy prices propping up inflation in the near future.

* - that start date is June 8th

Elsewhere in Vienna, the news that oil producers have not agreed on a ceiling on output ( not exactly a big surprise) has sent crude prices lower.

But Opec members are putting a brave face on it, and Saudi Arabia has said it is open to a policy change at the end of the year.

And as expected the group did elect Nigeria’s Mohammed Barkindo as the group’s secretary general.

The sad collapse of BHS this afternoon mean there will be even more pressure on its former owner, Sir Phillip Green, when he testifies to parliament later this month.

MPs will surely ask Green about the dividends paid to his family during the good times, and the deficit in the BHS pension fund.

Dominic Chapell, who bought BHS for a pound, is also going to face some stern questions.

Jon Copestake, chief retail & consumer goods analyst at the Economist Intelligence Unit, explains:

Many employees facing the loss of livelihood will no doubt be paying close attention to the scheduled appearances of Dominic Chapell and Sir Philip Green before the work and pensions committee over the next two weeks.

The question of how company executives were able to extract so much money from the retailer during its 16 year drift into liquidation will no doubt be high on the agenda, especially since the failure of a retail brand like BHS has been something that any visitor to its half empty stores in recent years might have made an educated guess at.

BHS’s failure comes just two days after Austin Reed went under, Copestake adds:

For those looking for a silver lining respite will be scant. BHS and Austin Reed had a combined high street presence of over 280 stores, with closures likely to make a tangible impression on some high streets.

As with all fire sales, the best assets will no doubt be picked up cheaply and resurrected by more successful retailers, which will make some dent in the job losses, but many will not as the British High Street continues to undergo a painful correction to accommodate changing shopper habits.

And finally....

Q: What structural reforms does the ECB most want to see implemented by eurozone governments?

Draghi won’t be lured into telling European leaders what to do. National governments know what’s most important on their own patch, he smiles.

But he does highlight the important of labour market reforms - a major issue in his home country, Italy.

And that’s the end of the ECB press conference.

Q: Given Europe’s persistently weak inflation rate, should the ECB alter its target (currently 2%) to something more achievable?

Dreadful idea, Draghi insists.

That would seriously undermine the bank’s credibility, raising the ‘risk premium’ on eurozone assets, driving real interest rates higher, and ultimately making it harder to ensure price stability.

So he opposes raising, or lowering the inflation goal.

Tom Fairless of the Wall Street Journal then puts Draghi on the spot, asking:

Q: Would the ECB would really halt its QE programme next March, given it expects inflation to be just 1.6% in 2018?

Draghi says the ECB would not hesitate to act, if needed, to drive inflation up.

We can adjust the program in a way that could meet the desired size. We are willing and ready to do so.

Another question: Is Mario Draghi worried about the impact on savers from record low interest rates?

Draghi agrees that this is a concern in several countries, not just Germany (where savers are particularly irked).

But he insists that loose monetary policy is essential now, to help the eurozone economy back to health.

He adds:

For interest rates to be higher tomorrow, they must be low today.

The markets aren’t happy that the ECB hasn’t welcomed Greek bonds back to the fold today:

Onto questions...

Q: Why are the ECB’s forecasts not more optimistic, given the stimulus measures it has taken?

Draghi says the ECB needs to see the impact of the measures it drew up in March. But he insists that its policies have “made a lot of difference”, and been very effective.

Mario Draghi ends his statement with his traditional call for eurozone governments to implement structural reforms.

He singles out the EC’s “Juncker Plan”, saying this spending plan needs to be boosted.

The ECB has only made small adjustments to its inflation forecasts, dashing hopes that price inflation could get close to the 2% target by the end of 2018.

Draghi says the ECB has revised its growth forecast for 2016 to +1.6%, from +1.4% before.

However, it has left its forecasts for the next two years unchanged.

Draghi is early! You can watch the press conference here.

A tiny gobbet of US economic news, while we wait for the ECB press conference.

US private sector companies created 173,000 new jobs in May, which (remarkably) is exactly what Wall Street had expected. Yes, economists got a forecast right.

That’s up from 166k last month (which has been revised up from 155k).

It suggests tomorrow’s US Non-Farm Payroll (the main measure of the jobs market) won’t be a shock.

Here comes the ECB’s monetary policy decision......

Reporting from OPEC’s meeting is more dangerous than I thought.

Footage has just emerged of a cameraman in Vienna clattering into a glass door, while trying to film Iran’s Bijan Namdar Zangeneh.

Update: The intrepid cameraman was Bloomberg’s Rae Hurring, who we hope isn’t damaged.

Bond trading giant Pimco has now issued its new Global Outlook report.

It warns that the world economy is “Stable But Not Secure”, and sees growing dangers as monetary policy reaches its limits.

Pimco cites some familiar themes – persistently low inflation, high debt levels, China’s slowing economy and the problems in the eurozone. And it fears those problems could get steadily worse...

Here’s the key points:

• In the absence of structural reforms, we are approaching the limits of central bank policy.
• Increasingly experimental policy is creating greater uncertainty and stretching valuations.
• Unsustainable debt levels mean that long-term risks of capital impairment or inflation are rising.
• Political uncertainty is increasing.
• Greater regulation and related reduced transactional liquidity are enhancing local market volatility.

More here.

European stock markets have crept up this morning, as investors watch for developments in Vienna.

The FTSE 100 is up 27 points, or almost half a percent. That ends a two-day losing streak, and means the index is almost flat for 2016 again.

Nick Fletcher’s market report has full details of what’s up and down:

And here’s the situation across Europe:

Mystery of missing shoe solved!!

It belonged to Leslie Hayward, the managing editor of @EnergyFuse.

She parted company with a rather fetching pump in the mass scrum to get into the OPEC meeting room.

We recommend hefty walking boots on these occasions -- great for slowing down one’s rivals....

This chart shows how the Brent crude oil price has risen steadily since January, when it hit just $28 per barrel.

Today’s meeting comes two months after Opec failed to get any deal on production cuts at an emergency meeting in Doha.

The oil price has actually risen by over 10% since then, as production cuts by non-Opec members have eliminated the supply glut.

And that’s why its hard to see a deal to curb production today. With oil at $50 per barrel, ministers must be tempted to sit tight and hope prices rise on their own.

Also, getting Iran to accept production curbs is clearly a non-starter. Tehran is still celebrating the end of international sanctions on oil production, so is obviously reluctant to reimpose them itself.

Journalists in Vienna are being offered a hearty array of biscuits and crisps to keep them on the go:

No more word on the missing shoe, though....

The Financial Times reckons Saudi Arabia’s is changing its strategy, after telling reporters that Opec should “steward the market” [see earlier post].

Their correspondents Anjli Raval and David Sheppard write:

Khalid Al Falih, speaking at the Opec secretariat prior to the group’s twice-yearly meeting, said the group should “encourage the rebalancing to take place” and said the kingdom wanted to avoid any oil shocks, dampening fears Saudi Arabia is preparing to raise production significantly.

“Whatever action we take will be taking into consideration that the market is doing quite well by itself, so we will be very gentle in our approach,” said Mr Al Falih.

Saudi Arabia is expected to propose reinstating the group’s production ceiling, which was removed entirely at the December gathering of ministers.

Alex Schindelar, news editor at Energy Intelligence Group, reckons few OPEC ministers will push for production curbs in Vienna.

Energy analyst Joe McMonigle is tweeting from the Opec meeting. He doesn’t see any signs of a production cap today:

The United Arab Emirates has put its finger on OPEC’s fundamental problem....

Algeria’s representative has suggested that Opec might agree quotas for each country, rather than a flat cap.

Angola’s oil minister told reporters that there is “a possibility” of setting an oil output ceiling today.

Jose Botelho de Vasconcelos added that the prospect of $60 per barrel oil is “not bad”, but $80/barrel “would be better”.

Better for Opec, but not for consumers and oil importers, of course.

The oil price has just broken through the $50 mark, as the OPEC meeting gets underway.

Brent crude is up 0.8% at $50.12 per barrel, a one-week high.

However, I don’t think that’s because investors are expecting a production cap to be agreed today, given Iran’s opposition....

There’s tight security in Austria today as OPEC oil ministers arrive:

The OPEC oil ministers will have to take one decision in Vienna today - electing a new secretary general.

Our energy editor, Terry Macalister, explains:

Mohammed Barkindo, a former boss of Nigeria’s national oil company, is in pole position to be installed as front man for the oil cartel, whose lack of internal unity leaves it unable to take decisive action.

But otherwise, little firm action is expected, as the oil price has recently risen back to $50 per barrel.

The laissez-faire consensus more likely to prevail was outlined by Suhail bin Mohammed al-Mazrouei, the energy minister for the United Arab Emirates, who said: “Supply and demand are working and this is the element of this (Opec) policy. From the beginning of the year until now, the market has been correcting itself upward. This is the year of correction.”