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On November 10, the Houthi rebels in Yemen warned on the 9th that if the ceasefire agreement in the Gaza Strip breaks down, the group will resume attacks on Israel and ban Israeli ships from sailing in the Red Sea and the Arabian Sea.Market news: Progressive Democratic lawmakers in the United States have expressed dissatisfaction with the emerging agreement to end the shutdown and are preparing to raise objections at a Senate Democratic caucus meeting.November 10th - On November 9th local time, the Federal Aviation Administration (FAA) reported that more than 15 air traffic control centers in the United States reported staff shortages that day. The FAA announcement indicated that some facilities at some of the busiest airports in the U.S., including New York, Washington D.C., Atlanta, Dallas, and Chicago, were affected. It is understood that staff shortages may force air traffic control agencies to reduce the number of flights at certain airports to maintain safety, potentially causing widespread delays.On November 10th, Goldman Sachs stated that a growing number of US investors are buying Japanese stocks, particularly those focused on technology and artificial intelligence, attracted by their strong returns relative to US stocks. Bruce Kirk, Goldman Sachs chief Japan equity strategist, said, "The pace of US capital inflows has reached its fastest level since Abenomics." He added that active participation by US investors in Japanese equities has reached its highest level since October 2022. This influx of US funds reflects the strong performance of Japanese equities this year, boosted by the appreciation of the yen and optimism surrounding Sanae Takashis stimulus policies. In dollar terms, the Nikkei 225 index has risen approximately 30% this year, far exceeding the S&P 500s 14% gain. Kirk believes there is still room for further foreign capital inflows, as global investors net holdings in Japanese equities remain well below the peak levels seen during "Abenomics," and continued global investors need for asset diversification may also support this trend.On November 10th, the Ukrainian State Electricity Company announced that due to Russias continued attacks on Ukrainian energy facilities, most regions of Ukraine will experience 24-hour power rationing on November 10th. The company stated that the rationing will last from midnight to 11:59 PM, and industrial users power consumption will also be limited during the same period. The Ukrainian government also urged the public to conserve electricity during peak hours.

Energy shortage triggered economic recovery concerns, U.S. oil trading fluctuated and closed above US$80

Eden

Oct 26, 2021 11:02

On Tuesday (October 12) U.S. oil futures rose by US$0.12, or 0.15%, and settled at US$80.64/barrel; Bulk Oil fell by US$0.23, or 0.27%, to US$83.42/barrel, which was as high as US$84.23 during the intraday session. , As low as US$82.72. The shortage of natural gas and coal during the winter in the northern hemisphere has prompted some people in the power industry to switch to fuels such as diesel and fuel oil. Investors are assessing how the global power crisis will affect oil demand this winter, and the intraday trend is turbulent.

On Tuesday, the authorities of two major energy-consuming countries in Asia rushed to fill the growing power supply gap, hitting global stocks and bond markets, fearing that rising energy costs would intensify inflation. Europe is suffering from the pressure of soaring natural gas. CIBC Private Wealth Management senior energy trader Rebecca Babin said that when the price of natural gas in Europe reaches a price equivalent to $250 per barrel of crude oil, it is difficult for us to predict what will happen.

James Whistler, SSY's global head of energy derivatives in Singapore, said that the crude oil market has been involved in a widespread rebound in the entire energy industry. High natural gas and coal prices have boosted the prospect of electricity companies turning to rely more on oil for power generation. Driven by energy shortages in Asia, Europe and the United States, electricity prices have risen to record levels in recent weeks. Analysts estimate that gas-to-oil conversion in the power generation industry may increase global crude oil demand by 250,000 to 750,000 barrels per day. Saudi Aramco estimates that the natural gas shortage has increased oil demand by about 500,000 barrels per day, and Citigroup estimates that it may reach 1 million barrels per day.

At the same time, the International Monetary Fund (IMF) on Tuesday lowered the growth prospects of the United States and other major industrialized countries, and said that continued supply chain disruptions and price pressures hindered the recovery of the global economy from the new crown epidemic. The IMF's "World Economic Outlook" lowered the global growth rate forecast for 2021 from 6.0% in July to 5.9%, and maintained the growth rate forecast for 2022 at 4.9%.

Price Futures Group analyst Phil Flynn said that people are beginning to realize that the risk of rising energy prices may derail economic growth. Is the demand for energy a good thing or a bad thing?

Analysis of crude oil futures spreads and time skew (skew) shows that as traders reflect expectations of falling inventories, the bullish outlook for oil prices has strengthened. The premium of WTI futures in recent months to the next delivery month contract is testing the high level three years ago, highlighting the tight supply in the market. This phenomenon occurred in October, and this month's price difference is usually narrowed by seasonal increases in inventory in the warehouse center Cushing, Oklahoma. In percentage terms, this premium was the largest since 2011. At that time, there was a traffic bottleneck near Cushing, and WTI rose by more than 17% that month.

Last week, the spread between put and call options, also known as skew, fell below zero for the first time since 2019. The skewed downside shows that oil traders are more willing to pay for price insurance for big increases rather than big drops. There is a negative correlation between skewness and oil prices, with a daily average of 0.3 in the 120 days ending on Monday.

(4 hours chart of US Oil)

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