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July 14th - With the summer vacation approaching, cross-border travel in the Guangdong-Hong Kong-Macao Greater Bay Area is booming, and passenger traffic at the Gongbei Port, which is connected to Macao by land, continues to increase. Since July, the Gongbei Port has seen an average of over 310,000 inbound and outbound passengers per day. According to Gongbei Customs, in the first half of this year, the total number of inbound and outbound passengers at the Gongbei Port exceeded 64 million, a 6% increase compared to the same period last year, with a peak daily passenger flow of 460,000.Euro Stoxx 50 futures fell 0.35%, German DAX futures fell 0.35%, and UK FTSE futures fell 0.28%.1. Sudden Geopolitical Military Conflict: Serious clashes erupted in the Strait of Hormuz and surrounding waters. According to CCTV and other media reports, two UAE oil tankers were attacked by Iranian cruise missiles in the southern channel of the strait (resulting in one death and eight injuries); the Iranian Revolutionary Guard announced the attack and destruction of two foreign oil tankers that ignored warnings. Simultaneously, the US Central Command announced it would reinstate the blockade of maritime traffic to and from Iranian ports at 4:00 AM Beijing time on July 15th. 2. Macroeconomic Policy and Concerns about Soaring Transportation Costs: Trump stated he would impose a 20% protection fee on all goods transported through the Strait of Hormuz. Rico Luman, senior economist at ING, estimated this could increase the cost of transporting oil through the strait by another $16 per barrel (to $26), potentially increasing the overall cost of a large oil tanker by over $30 million. 3. Weakening Spot Prices: The spot market is entering a downward trend, shifting from a period of high demand to a lower price. The latest SCFIS European line is 3656.38 points, slightly lower than expected. According to Haitong Futures statistics, the market average for Late July is approximately $5130 USD for a container load (TCL). It is expected that the OA and PA alliances still have room to follow Maersks $4800 USD adjustment for 30-week TCL openings, and the average could potentially fall below $5000 USD. 4. Haitong Futures view: The EC main contract is currently betting on the actual downward slope after freight rates peak. The previously anticipated low capacity in the 31-week period might have altered the current linear extrapolation of the downward freight rate path, but the current adjustment after the empty schedule has smoothed the decline. The 08 contract valuation has already largely priced in the subsequent decline; observe whether there is a possibility of a gradual decline. There is a lack of significant marginal improvement drivers in the short term. 5. Guangfa Futures view: Geopolitical disturbances have resurfaced, and short-term downward momentum is nearing exhaustion. For longer-term contracts, the expectation of the resumption of Red Sea shipping, coupled with the uncertainty of the US-Iran conflict, results in greater volatility, but there is currently no clear trend. (The above content is compiled from publicly available market information from Haitong Futures, Guotou Futures, etc., and is for reference only. It does not constitute investment advice.)BP: Expects natural gas and low-carbon energy production to be 750,000 to 770,000 barrels of oil equivalent per day in the second quarter of 2026.BP: Expects oil and gas production and operations to be between 1.42 million and 1.45 million barrels of oil equivalent per day in the second quarter of 2026.

In a risk-on environment with a weaker US dollar, WTI consolidates weekly losses above $83,000

Alina Haynes

Sep 09, 2022 17:17

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The price of WTI crude oil is higher for the second day in a row while paring the weekly losses at the eight-month low on Friday during the Asian session. However, by the time of publication, the black gold has reached a new intraday high of around $83.50.

 

Recent news reports from the US Treasury Department regarding the oil price cap appear to have helped drive up energy prices together with stronger sentiment and a weaker US dollar. According to the US Treasury source, "the oil price cap should be set above the marginal production cost, taking into account past Russian oil prices."

 

In other news, stronger sentiment and slow US Treasury yields cause the US Dollar Index (DXY) to fall intraday by 0.55%, to 109.05 at the latest. It's interesting to see that after a solid day, the US 10-year Treasury yields are still stuck around 3.32%, while the S&P 500 Futures tracks Wall Street's gains at approximately 4,020.

 

Recent market sentiment appeared to be aided by remarks made by US Treasury Secretary Janet Yellen, which suggested that trade relations between the US and China were set to improve. The market's attitude also appeared to have been aided by recently stronger US statistics and expectations that global central bankers will be able to offset the shock caused by inflation with a comprehensive strategy and higher rates. The Wall Street Journal (WSJ) article, on the other hand, raises some concerns about the future of China's technological enterprises and casts some doubt on the optimism.

 

A price document examined by Reuters on Friday revealed that Kuwait has decreased the official selling prices for its oil grades for the month of October from the previous month. Before the present program ends in October, US Energy Secretary Jennifer Granholm said the administration of US President Joe Biden is considering whether additional releases of crude oil from the country's emergency stockpiles are necessary. Prior to that, a Department of Energy official reportedly told Reuters that the White House was only considering releasing the 180 million barrels from the US Strategic Petroleum Reserve (SPR) that the president had already stated.

 

It should be highlighted that the recent decline in China's inflation data, coupled with the hawkish central bank activities, presents a challenge to oil purchasers. Both China's Producer Price Index (PPI) and Consumer Price Index (CPI) show unfavorable results for August. However, compared to 2.8% market expectations and 2.7% in the prior year, the headline CPI declined to 2.5% YoY, and the PPI fell to 2.3% from 3.1% projected and 4.2% in the preceding year.


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