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On December 22, local time, Ukrainian President Volodymyr Zelenskyy revealed via social media that the Ukrainian team was in Florida, USA, reviewing clauses of documents related to ending the Russia-Ukraine conflict, security guarantees in Ukraine, and post-war reconstruction, and discussing the timeframe for the implementation of the resolutions. Zelenskyy stated that the consultations had made constructive progress, and the relevant outcomes were of great significance to the peace process and the long-term stability of Ukraine. He looked forward to briefings from Ukrainian officials on the details of the talks.On December 22, local time, U.S. Presidential Special Envoy Witkov stated that over the past three days, the Ukrainian delegation held a series of productive and constructive meetings with U.S. and European partners in Florida, with separate constructive meetings also held between the U.S. and Ukraine. Witkov also noted that the talks with the Ukrainian delegation focused particularly on the timeline for discussions and the sequence of follow-up steps.December 21 – According to sources, another oil tanker has been seized by the United States in waters near Venezuela as President Trump intensifies his oil blockade against the government of Venezuelan President Maduro. The seized tanker, the "Bella 1," is a Panamanian-flagged vessel under U.S. sanctions and was en route to Venezuela to load cargo. This interception follows the seizure of the "Century" supertanker early Saturday morning and the seizure of the "Skipper" tanker on December 10. The White House did not immediately respond to a request for comment.On December 21, local time, the Israel Defense Forces (IDF) issued a statement saying that during operations in northern Gaza that day, several suspicious individuals were spotted gathering near the Yellow Line, the ceasefire line. IDF fired warning shots, but three armed men crossed the Yellow Line and approached IDF forces, posing a "direct threat." IDF airstrikes subsequently killed them. The statement also noted that in two other separate incidents in northern Gaza, IDF forces also discovered two armed men crossing the Yellow Line and approaching soldiers. IDF airstrikes subsequently killed them.On December 21, the French presidential palace stated that it would determine the "best way" for French President Macron to hold dialogue with Russian President Putin "in the coming days." The French presidential palace welcomed Russias statement that Putin was willing to engage in dialogue with Macron, and that France believed the aim of such dialogue was to achieve a "stable and lasting peace," and that the content would be "transparent" to Ukraine and Europe.

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

Alina Haynes

Oct 13, 2022 14:38

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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.


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