EUR/USD 1.15683
1.338%
Gold 3357.10
2.040%
Oil 66.620
-3.233%
USD/JPY 147.431
-2.194%
GBP/USD 1.32607
0.406%
GBP/JPY 195.508
-1.753%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
On August 2, Alexei Pushkov, a member of the Constitutional Committee of the Russian Federation Council, stated that the world cannot replace the amount of oil supplied by Russia, which accounts for about 10% of the global oil supply. Pushkov wrote on his social platform: "Despite Trumps warning of imposing high secondary sanctions tariffs, Indian refineries continue to purchase Russian oil. The Indian side explained that if the global market stops accepting 9.5 million barrels of oil per day from Russia, oil prices may rise to $135-140 per barrel. In fact, such a large amount of oil supply cannot be replaced at all, because Russia accounts for about 10% of the global oil supply."According to Argus on August 2, the eight core OPEC+ members will decide on August 3rd whether to fully exit their 2.2 million barrels per day (bpd) crude oil production cuts in September or adopt a more cautious approach due to heightened supply and demand uncertainty. The group has already decided to implement approximately 80% of its planned 2.46 million bpd production increase (including a 300,000 bpd adjustment to the UAEs quota). Market expectations are for another 548,000 bpd increase in September, matching the accelerated increase in August and restoring production 12 months earlier than originally planned. One delegate confirmed his countrys support for completing the full production increase in September, a move long advocated by several major members, particularly given that some countries have been producing above their quotas. However, due to concerns about oil prices, at least one member favored a cautious approach, suggesting that the 548,000 bpd increase be split into smaller adjustments of 137,000 bpd per month from September to December.On August 2nd, Federal Reserve Board Governor Kugler abruptly announced his resignation on Friday, giving US President Trump an opportunity to fill the Fed vacancy earlier than expected and potentially forcing him to finalize his next chairmanship months in advance. Derek Tang, an economist at the monetary policy analysis firm LH Meyer, said, "The ball is now in Trumps court. He has been pressuring the Fed to install his own candidate. Now his opportunity has arrived." While Powells term as chairman ends in May of next year, his term as a governor runs until 2028. If Powell doesnt voluntarily resign as a governor, Trump wont have another chance to fill the vacancy before 2028. In this scenario, Trump might be forced to fill Kuglers vacancy with a candidate he plans to promote as chairman. Tobin Marcus, head of US policy and political strategy at Wolfe Research, noted, "The key is that this is the only vacancy Trump can fill. If he wants to find the next Fed chair from outside, the nomination could be announced earlier."On August 2nd, Canadas retaliatory tariff increase against the United States earlier this year is leading the Trump administration to adopt a differentiated trade strategy with Mexico. Previously, Canada and Mexico enjoyed equal treatment—both were subject to a 25% base tariff and enjoyed extensive duty-free access under the USMCA. However, this situation took a sudden turn on Thursday: Trump announced a 90-day suspension of tariffs on Mexican goods, while simultaneously raising tariffs on Canadian products to 35%. Existing retaliatory measures have not only failed to curb the escalation of the conflict but have instead prompted even more severe retaliation from the United States. Economist and former Bank of Canada Governor Mark Carney has stated that retaliatory measures are limited in effectiveness. In fact, the Canadian government has diluted retaliatory tariffs through numerous exemptions, refrained from retaliating when the US raised steel and aluminum tariffs to 50%, and even eliminated its digital services tax at the request of the US.On August 2, the Palestinian Islamic Resistance Movement (Hamas) issued a statement today (August 2) emphasizing that "unless our national rights are fully restored, the most important of which is the establishment of an independent Palestinian state with Jerusalem as its capital and full sovereignty, we cannot give up armed resistance."

WTI supply worries are in the spotlight prior to the US CPI

Alina Haynes

Oct 13, 2022 14:38

 163.png

 

West Texas Intermediate (WTI) has been in the red on Wednesday, losing roughly 1.8% at Wall Street's closing bell. Following last week's two-million-barrel-per-day reduction in production plans, OPEC reduced its demand forecasts for this year and the following year by two million barrels per day. WTI traded between $86.30 and $90.05 prior to the time of writing, when it was trading at 87.03.

 

Oil prices are a major topic this week in relation to Thursday's release of the US Consumer Price Index, where core prices have likely remained robust in September, with the series reporting another substantial 0.5% MoM increase. "Shelter inflation likely remained elevated, but we anticipate a dramatic decline in the price of old automobiles. Importantly, gas prices likely provided additional respite for the headline figure, falling approximately 5% month-over-month. Our MoM predictions imply 8.2%/6.6% YoY growth for total and core prices," TD Securities analysts explained. The statistics will likely strengthen the Federal Reserve's resolve to slow the economy through higher interest rates and heighten recession worries, both of which have been bearish for oil.

 

OPEC slashed its 2022 demand prediction by 0.5 million barrels per day in its authoritative Monthly Oil Market Report, citing "the extension of China's zero-COVID-19 limitations in certain locations and economic concerns in OECD Europe." Despite resistance from the Biden Administration, OPEC+ reduced its production plans last week in an effort to prop rising oil prices.

 

TD Securities analysts stated, "The OPEC+ group's effective 1.1m bpd cut will tighten physical balances, providing a positive impetus for both spot prices and timespreads and so encouraging greater involvement." "This is setting the stage for a big price increase as US SPR releases come to a halt and Russian production begins to decline at a quicker rate. The return of shipments from Kazakhstan provides a partial offset, but reports indicate that oil industry strikes in Iran have moved to a large crude refinery in the southwest, adding to supply uncertainties. The right tail of oil prices remains robust.

 

"In the meantime, a pipeline rupture has halted an estimated 200k bpd of flow from the Northern Druzhba pipeline, aggravating the near-term tightening of balances. This leaves traders focused on the demand side of the equation; a really harsh landing might still derail the rebound in energy prices, but the recession that most analysts anticipate will likely result in a slowing, but not a drop, in oil demand growth. This might worsen the tightness of energy markets at a time when Chinese mobility is strengthening, as evidenced by our monitoring of road traffic conditions in the 15 cities with the highest vehicle registrations.


Suggestion