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February 1st - On January 31st, House Democratic Leader Hakim Jeffries stated that they would not help Republicans pass a federal government funding bill through a fast-track process. US media pointed out that Jeffries statement suggests the US government shutdown may last longer than expected. The US Senate passed a funding bill for several federal departments for the remainder of the fiscal year on January 30th, and the bill will be sent to the House for consideration. However, the House is currently in recess and may vote on the funding bill as early as February 2nd. It is reported that the operating funds for several federal departments, including the State Department and the Pentagon, were exhausted on January 30th, thus the US federal government entered a partial shutdown starting at midnight on January 31st.On February 1st, India raised taxes on some stock transactions in an effort to further curb speculative trading by retail investors. According to the budget submitted to Parliament on Sunday, the Indian government increased the securities transaction tax on stock index futures from 0.02% to 0.05%. The tax rate on option premiums and option exercise also increased from 0.1% to 0.15%. This news triggered a sharp drop in the stock market, with Indias main index, the NIFTY 50, falling nearly 3% intraday. Shares of the Bombay Stock Exchange (BSE), Indias second-largest stock exchange, and brokerage stocks, including AngleOne, all fell sharply. This move signifies Indias determination to curb speculative trading. The influx of retail traders had previously made India the worlds largest market for such products by contract trading volume. Regulators had introduced several restrictions by the end of 2024, including limiting the number of index option contracts per exchange to one per week.Tencent Yuanbao App has risen to the number one free app on the Apple App Store, after announcing the launch of a 1 billion yuan cash bonus campaign.February 1st - US President Trump stated on January 31st that India will import oil from Venezuela, not Iran. He also claimed that the US welcomes the agreement reached between China and the US to import Venezuelan oil. According to Reuters, Trump made these remarks aboard Air Force One, en route from Washington D.C. to Florida. He said the US and India had finalized an agreement, "at least in principle."February 1st - On February 1st local time, Iranian Parliament Speaker Mohammad Ghalibaf issued a stern statement at an open parliamentary session, announcing reciprocal countermeasures against recent European designations of the Iranian Islamic Revolutionary Guard Corps (IRGC). Ghalibaf declared that Iran officially designates the armed forces of European countries as "terrorist organizations." Ghalibaf emphasized that the EU will bear full responsibility for all legal and practical consequences arising from this designation, including the risk of security confrontation within the region.

Oil Slides 4 Percent , Below $100 on China Lockdowns, Reserves Release Plan

Aria Thomas

Apr 12, 2022 09:16

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Brent futures sank $4.30, or 4.2 percent, to $98.48 a barrel, while WTI oil dropped $3.97, or 4.0 percent, to $94.29. Brent closed at its lowest level since March 16.


China, the world's largest oil importer, has seen a halt in fuel use as a result of COVID-19 lockdowns in Shanghai, experts at the Eurasia Group consultancy said. Shanghai, China's financial hub, began reducing lockdowns in certain areas on Monday, despite a record of over 25,000 new COVID-19 illnesses.


"Even when Shanghai's limitations are relaxed, China's zero-Covid rules will almost certainly continue to be a drag on demand," Eurasia Group said, stressing that Shanghai's lockout likely lowered China's total oil consumption by up to 1.3 million barrels per day (bpd).


To assist compensate for a deficit in Russian crude after Moscow's sanctions, IEA members, including the US, would discharge 240 million barrels of oil over the next six months.


The release of Strategic Petroleum Reserve (SPR) volumes totals 1.3 million barrels per day (bpd) over the next six months, adequate to compensate for a 1 million barrels per day (bpd) deficit in Russian oil production, according to JP Morgan analysts.


"The (SPR) release will be the biggest in history, and it has already broken the back of the WTI price curve," said Robert Yawger, executive director of energy futures at Mizuho, adding that spreads were edging closer to contango.


Contrary to popular belief, contango indicates an oversupplied market. It occurs when pricing for future months are greater than those for the current month.


In comparison, when supply fears were strong in early March, the WTI curve was in what Yawger referred to as "super-backwardation," with each month ending at least $1 a barrel lower than the previous month until November 2023.


The US dollar was on course to increase for an eighth consecutive day versus a basket of other currencies, putting upward pressure on oil prices. Oil becomes more costly for holders of foreign currencies as the dollar strengthens.


The European Union's (EU) administration is formulating recommendations for a Russian oil embargo, despite the fact that no agreement to restrict Russian petroleum has been reached.


The Organization of the Petroleum Exporting Countries (OPEC) warned the EU that sanctions on Russia might result in one of the biggest oil supply shocks in history, with no way to compensate. OPEC hinted that it will not increase oil production.


President Joe Biden of the United States and Indian Prime Minister Narendra Modi met Monday as Washington pressed its Asian partner to back its reaction to Russia's incursion.


India, the world's third-largest oil importer, has boosted its imports of Russian crude in recent months as a result of Moscow's compelled sale of oil at a deep discount after the invasion of Ukraine.


In March, India's fuel demand reached a three-year high, with petrol sales reaching an all-time high.

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