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Market News Crude Oil Trading Reminder: Concerns about demand recovery are resurgent, the EU wants to effectively sanction Russia's energy exports, pay attention to Russia's response measures
Crude Oil Trading Reminder: Concerns about demand recovery are resurgent, the EU wants to effectively sanction Russia's energy exports, pay attention to Russia's response measures
During the Asian session on April 8, U.S. oil is now at $96.92 per barrel; oil prices closed lower on Thursday, expanding this week’s decline. There is uncertainty about whether the euro zone can effectively sanction Russia’s energy exports, and consumer countries have announced plans to withdraw from emergency reserves. medium-to-large oil release. Another factor weighing on oil prices is fears that the spread of the virus will slow the recovery in oil demand.
2022-04-08
8460
In Asian time on Friday (April 8), U.S. oil is now at $96.92 per barrel; oil prices closed lower on Thursday, extending this week's decline. There is uncertainty about whether the euro zone can effectively sanction Russia's energy exports, and consuming countries Announcing a massive release of oil from emergency reserves. Another factor weighing on oil prices is fears that the spread of the virus will slow the recovery in oil demand.
During the day, focus on the final monthly rate of wholesale inventories in the United States in February; at 1:00 on Saturday, the total number of drilling rigs in the United States for the week ended April 8 was announced.
[Burd said the Fed should raise interest rates by 50 basis points in six remaining meetings this year]
St. Louis Fed President Bullard said on Thursday that the central bank is lagging behind in fighting inflation and needs to raise interest rates by three percentage points by the end of the year, which means the Fed will raise interest rates by 50 basis points at each of its remaining six meetings this year.
Bullard said, "I hope to get to that level in the second half of the year ... we have to act" to get ahead of inflation, which is currently at three times the Fed's 2% target. "We are talking about long-term Action with maximum force."
That pace is slightly faster than Bullard suggested at the March Fed meeting, when he expected the federal funds rate to hit 3.25% by the end of the year. Minutes of the March meeting showed that "multiple" of Bullard's colleagues were prepared to raise rates by 50 basis points "one or more times" at the upcoming meeting.
But Bullard has outlined a path that exceeds even the market's current expectations for the Fed. Bullard's response to inflation may be the most aggressive among policymakers right now. Investors expect the Fed to raise its policy rate target range to 2.5%-2.75% by the end of the year, according to moves in federal funds futures contracts.
Bullard said even the "generous" application of standard monetary policy rules shows the Fed is "behind the curve" in fighting inflation, even after taking into account the "tightening" of financial conditions already happening in the market. These tightenings are based on investor expectations that the Fed will act more aggressively.
[U.S. initial jobless claims return to their lowest level in more than 53 years]
U.S. jobless claims fell last week, signaling further tightening of labor market conditions heading into the second quarter, which could keep inflation high. Initial claims fell back to a more than 53-year low in mid-March, partly reflecting seasonal factor revisions, a model the government uses to strip out seasonal fluctuations in the data.
During the COVID-19 pandemic, the Labor Department switched from a multiplicative model to an additive model to seasonally adjust initial and continuing jobless claims. Economists have complained that multiplicative models are less reliable due to the economic shock of the Covid-19 crisis.
The U.S. Department of Labor said on Thursday, “Given that most of the significant impact of the pandemic on the unemployment insurance series has abated, the seasonally adjusted model will again use the multiplicative model, which statistical tests show that under normal circumstances the unemployment insurance series should be multiplicative. Estimates.” Initial jobless claims fell 5,000 to a seasonally adjusted 166,000 for the week ended April 2, matching the number since November 1968 for the week ending March 19. minimum level.
"The message from these volatile and revision-prone data remains that the labor market is very tight by most historical standards," said Conrad DeQuadros, senior economic adviser at Brean Capital. Continued for the week ended March 26. Unemployment claims rose by 17,000 to 1.523 million, but the trend remains low.
[Multiple politicians in the United States were diagnosed with new coronary pneumonia after attending the same dinner]
U.S. Attorney General Merrick Garland, Commerce Secretary Gina Raimondo, House Intelligence Committee Chairman Adam Schiff and Democratic Representative Joaquin Castro attend the annual Gridiron Club in Washington, D.C. After the dinner, it was announced that they had tested positive for the new coronavirus. On April 6, local time, Tom DeFrank, chairman of the Gridiron Club, said that the club had so far learned that 14 guests who attended the dinner had tested positive for the new crown, and they were mostly concentrated at three tables.
On April 7, local time, Pelosi's spokesman Drew Hamill wrote on social media Twitter: "After testing negative this week, Speaker Pelosi (just) received a positive test for the new crown. Asymptomatic. The Speaker has been fully vaccinated and given a booster shot... The Speaker will be quarantined in accordance with the (US) CDC guidance."
[U.S. Senate passes a bill to ban energy imports from Russia]
On April 7, local time, the U.S. Senate passed a bill banning the import of oil and natural gas from Russia with 100 votes in favor and 0 against.
The legislation bans U.S. imports of oil, natural gas, coal and other energy products from Russia. Not long ago, the Senate unanimously passed a trade status bill that abolishes normal trade relations between Russia and the United States, as well as Belarus and the United States. Both the oil ban bill and the trade status bill are expected to be voted on in the House of Representatives later on April 7, local time.
[EU member states will reach consensus on a new round of sanctions against Russia]
On the 7th local time, Borrell, the European Union's high representative for foreign affairs and security policy, said in Brussels that the 27 EU member states are expected to reach a consensus on the fifth round of sanctions against Russia proposed by the European Commission at the latest on the 8th, including a ban on the sanctions from Russia. Import coal and other measures. The day before, representatives of EU member states conducted intensive consultations on the measures proposed by the European Commission, but there were internal differences and a consensus could not be reached as scheduled.
[Russian Foreign Ministry spokesman said that Russia will respond to all unfriendly acts of the West]
Russian Foreign Ministry spokeswoman Zakharova said on the 6th that the European Union announced the expulsion of 19 diplomats from Russia's permanent mission to the European Union on "fabricated and unfounded excuses" a few days ago. The Russian side believes that this is an openly unfriendly act that is "firmly unacceptable", and the Russian side will respond to this. The EU should take full responsibility for the consequences of this destructive act.
Zakharova also said that for every unfriendly behavior by Russia, Russia will give a corresponding response. She stressed that what the West is doing will effectively lead to a stalemate in bilateral relations, meaning a "deep freeze of relations".
According to the TASS news agency, Russian Deputy Foreign Minister Glushko told the media on the 6th that Russia is considering retaliatory measures against a package of new EU sanctions to protect Russia’s legitimate interests.
[IEA will release more than 100 million barrels of oil reserves or it will be difficult to fill the market gap]
The International Energy Agency (IEA) said on the 6th that its member countries plan to release 120 million barrels of crude oil reserves to deal with the supply gap and ease the surge in oil prices caused by the conflict between Russia and Ukraine. Among them, the United Kingdom will release 4.41 million barrels of crude oil reserves; Germany will release 6.48 million barrels of crude oil reserves; France will release 6.05 million barrels of crude oil reserves. However, the analysis pointed out that due to the current large crude oil gap and the further energy sanctions imposed by the United States and Europe on Russia, the release of oil reserves will not play a significant role in controlling oil prices in the long run.
Garibetti, vice president of senior analysis at consulting firm Smart Consulting, said: "The United States releases 1 million barrels per day of strategic oil reserves, while Russia's production may decrease by 2 million barrels per day, making it difficult to fill the gap." Garibetti said that in the current In a crisis, the historic release of large crude oil reserves was the right decision, and consumers should soon feel the benefits, but it only solved half the problem.
UBS Group said recently that although the use of strategic crude oil reserves may help alleviate supply shortages in the short term, it does not believe that this is a long-term solution to the global energy crisis and will not solve the structural imbalance in the oil market. UBS continues to see higher oil prices in 2023. UBS also said it was unclear how much refinery demand would be for sour crude from the U.S. Strategic Crude Reserve because the U.S. has not yet undertaken such a large-scale release of crude oil reserves. Some market participants believe that logistical bottlenecks such as pipeline capacity may limit the scale of the release of strategic crude oil reserves, which means that the actual release of strategic crude oil reserves in the United States in the next six months may be lower than the planned 180 million barrels.
[German oil prices jumped about 20% in March, which will continue to hit consumers for more than two years]
A roughly 20 percent rise in German oil prices in March will hit consumers in Europe's largest economy for more than two years, a study by the German Institute for Economic Research (DIW) showed on Wednesday. German inflation jumped 7.3 percent in March from a year earlier, the highest in more than 40 years, as prices for natural gas and oil surged following Russia's invasion of Ukraine.
Even if oil prices fall again, this jump in oil prices will keep consumer price growth above 1.5 percent for more than two years, according to the study, first published by Handelsblatt. Other effects of the war, such as sanctions, and general post-pandemic economic development were not taken into account. Study co-author Malte Rieth told the paper it was questionable whether the oil embargo imposed on Russia would have a strong inflationary impact. It is conceivable that the impact will be limited because without Russia, there are other oil suppliers vying for the market. "
[Iraq's Kurdish capital hit by three rockets]
According to the news released by the Iraqi security department, three rockets hit Erbil, the capital of the Kurdish Autonomous Region in northern Iraq, around midnight on the 6th local time. One of the rockets landed near a local oil refinery. cause any property damage or personal injury.
[The S&P 500 index reversed the decline and closed higher in late trading]
The S&P 500 closed higher on Thursday, with Pfizer and Tesla driving a late-day rebound, while investors focused on the situation in Ukraine and the prospect of more aggressive Fed action. Shares in electric car makers Tesla and Microsoft rose 1.2% and 0.6%, respectively, helping to lift the S&P 500 and pushing the Nasdaq up slightly. Pfizer jumped 4.3 percent, also supporting the S&P 500 after the company said it would buy privately held ReViral Ltd. for as much as $525 million in less than six months. The second acquisition, aimed at expanding its drug portfolio.
The S&P 500 was down for most of the day, but rebounded near the close. "We don't know how the Ukraine issue will be resolved," said Dennis Dick, a trader at Bright Trading LLC. "We also don't know how the hawkish Fed will affect the economy, much less whether they can lead the economy to a soft landing, which leads to The market is up and down, and if you follow the trend, you get lost in the market because the market is volatile at the moment.”
Large-cap growth stocks came under pressure earlier this week after comments from Fed policymakers and minutes from the Fed's March meeting suggested a quick withdrawal of stimulus implemented during the pandemic. "Investors continue to realize that the Fed is not yet at its most hawkish and that we are going to err on the side of what they want to do more to keep inflation under control," said Anastasia Amoroso, chief investment strategist at investment markets firm iCapital Network. Members currently see an 88.9% chance the Fed will raise rates by 50 basis points at its meeting next month.
U.S. companies will begin reporting first-quarter results in the coming weeks, and banks will officially kick off the earnings season next week. Analysts on average expect first-quarter earnings for S&P 500 companies to rise 6.4%, according to I/B/E/S data from Refinitiv. It grew more than 30% in the fourth quarter of last year.
Jake Dollarhide, chief executive of Longbow Asset Management, said, "As we enter the peak of earnings season, I expect volatility to be very prominent, and we may see strong results that exceed the highest expectations, but the forecast for the next 12 months will be lower. weak."
In general, oil prices fluctuated lower in the short-term due to the impact of the epidemic and the release of crude oil reserves by the IEA, but the decline was limited due to the new EU sanctions on Russia; oil prices may focus on Russia's response to EU sanctions in the short-term. As the weekend approaches, pay attention to geopolitics Uncertainty risk of the situation.
At 08:10 GMT+8, U.S. crude oil is now at $96.71 a barrel.
During the day, focus on the final monthly rate of wholesale inventories in the United States in February; at 1:00 on Saturday, the total number of drilling rigs in the United States for the week ended April 8 was announced.
Negative factors affecting oil prices
[Burd said the Fed should raise interest rates by 50 basis points in six remaining meetings this year]
St. Louis Fed President Bullard said on Thursday that the central bank is lagging behind in fighting inflation and needs to raise interest rates by three percentage points by the end of the year, which means the Fed will raise interest rates by 50 basis points at each of its remaining six meetings this year.
Bullard said, "I hope to get to that level in the second half of the year ... we have to act" to get ahead of inflation, which is currently at three times the Fed's 2% target. "We are talking about long-term Action with maximum force."
That pace is slightly faster than Bullard suggested at the March Fed meeting, when he expected the federal funds rate to hit 3.25% by the end of the year. Minutes of the March meeting showed that "multiple" of Bullard's colleagues were prepared to raise rates by 50 basis points "one or more times" at the upcoming meeting.
But Bullard has outlined a path that exceeds even the market's current expectations for the Fed. Bullard's response to inflation may be the most aggressive among policymakers right now. Investors expect the Fed to raise its policy rate target range to 2.5%-2.75% by the end of the year, according to moves in federal funds futures contracts.
Bullard said even the "generous" application of standard monetary policy rules shows the Fed is "behind the curve" in fighting inflation, even after taking into account the "tightening" of financial conditions already happening in the market. These tightenings are based on investor expectations that the Fed will act more aggressively.
[U.S. initial jobless claims return to their lowest level in more than 53 years]
U.S. jobless claims fell last week, signaling further tightening of labor market conditions heading into the second quarter, which could keep inflation high. Initial claims fell back to a more than 53-year low in mid-March, partly reflecting seasonal factor revisions, a model the government uses to strip out seasonal fluctuations in the data.
During the COVID-19 pandemic, the Labor Department switched from a multiplicative model to an additive model to seasonally adjust initial and continuing jobless claims. Economists have complained that multiplicative models are less reliable due to the economic shock of the Covid-19 crisis.
The U.S. Department of Labor said on Thursday, “Given that most of the significant impact of the pandemic on the unemployment insurance series has abated, the seasonally adjusted model will again use the multiplicative model, which statistical tests show that under normal circumstances the unemployment insurance series should be multiplicative. Estimates.” Initial jobless claims fell 5,000 to a seasonally adjusted 166,000 for the week ended April 2, matching the number since November 1968 for the week ending March 19. minimum level.
"The message from these volatile and revision-prone data remains that the labor market is very tight by most historical standards," said Conrad DeQuadros, senior economic adviser at Brean Capital. Continued for the week ended March 26. Unemployment claims rose by 17,000 to 1.523 million, but the trend remains low.
[Multiple politicians in the United States were diagnosed with new coronary pneumonia after attending the same dinner]
U.S. Attorney General Merrick Garland, Commerce Secretary Gina Raimondo, House Intelligence Committee Chairman Adam Schiff and Democratic Representative Joaquin Castro attend the annual Gridiron Club in Washington, D.C. After the dinner, it was announced that they had tested positive for the new coronavirus. On April 6, local time, Tom DeFrank, chairman of the Gridiron Club, said that the club had so far learned that 14 guests who attended the dinner had tested positive for the new crown, and they were mostly concentrated at three tables.
On April 7, local time, Pelosi's spokesman Drew Hamill wrote on social media Twitter: "After testing negative this week, Speaker Pelosi (just) received a positive test for the new crown. Asymptomatic. The Speaker has been fully vaccinated and given a booster shot... The Speaker will be quarantined in accordance with the (US) CDC guidance."
Bullish factors affecting oil prices
[U.S. Senate passes a bill to ban energy imports from Russia]
On April 7, local time, the U.S. Senate passed a bill banning the import of oil and natural gas from Russia with 100 votes in favor and 0 against.
The legislation bans U.S. imports of oil, natural gas, coal and other energy products from Russia. Not long ago, the Senate unanimously passed a trade status bill that abolishes normal trade relations between Russia and the United States, as well as Belarus and the United States. Both the oil ban bill and the trade status bill are expected to be voted on in the House of Representatives later on April 7, local time.
[EU member states will reach consensus on a new round of sanctions against Russia]
On the 7th local time, Borrell, the European Union's high representative for foreign affairs and security policy, said in Brussels that the 27 EU member states are expected to reach a consensus on the fifth round of sanctions against Russia proposed by the European Commission at the latest on the 8th, including a ban on the sanctions from Russia. Import coal and other measures. The day before, representatives of EU member states conducted intensive consultations on the measures proposed by the European Commission, but there were internal differences and a consensus could not be reached as scheduled.
[Russian Foreign Ministry spokesman said that Russia will respond to all unfriendly acts of the West]
Russian Foreign Ministry spokeswoman Zakharova said on the 6th that the European Union announced the expulsion of 19 diplomats from Russia's permanent mission to the European Union on "fabricated and unfounded excuses" a few days ago. The Russian side believes that this is an openly unfriendly act that is "firmly unacceptable", and the Russian side will respond to this. The EU should take full responsibility for the consequences of this destructive act.
Zakharova also said that for every unfriendly behavior by Russia, Russia will give a corresponding response. She stressed that what the West is doing will effectively lead to a stalemate in bilateral relations, meaning a "deep freeze of relations".
According to the TASS news agency, Russian Deputy Foreign Minister Glushko told the media on the 6th that Russia is considering retaliatory measures against a package of new EU sanctions to protect Russia’s legitimate interests.
[IEA will release more than 100 million barrels of oil reserves or it will be difficult to fill the market gap]
The International Energy Agency (IEA) said on the 6th that its member countries plan to release 120 million barrels of crude oil reserves to deal with the supply gap and ease the surge in oil prices caused by the conflict between Russia and Ukraine. Among them, the United Kingdom will release 4.41 million barrels of crude oil reserves; Germany will release 6.48 million barrels of crude oil reserves; France will release 6.05 million barrels of crude oil reserves. However, the analysis pointed out that due to the current large crude oil gap and the further energy sanctions imposed by the United States and Europe on Russia, the release of oil reserves will not play a significant role in controlling oil prices in the long run.
Garibetti, vice president of senior analysis at consulting firm Smart Consulting, said: "The United States releases 1 million barrels per day of strategic oil reserves, while Russia's production may decrease by 2 million barrels per day, making it difficult to fill the gap." Garibetti said that in the current In a crisis, the historic release of large crude oil reserves was the right decision, and consumers should soon feel the benefits, but it only solved half the problem.
UBS Group said recently that although the use of strategic crude oil reserves may help alleviate supply shortages in the short term, it does not believe that this is a long-term solution to the global energy crisis and will not solve the structural imbalance in the oil market. UBS continues to see higher oil prices in 2023. UBS also said it was unclear how much refinery demand would be for sour crude from the U.S. Strategic Crude Reserve because the U.S. has not yet undertaken such a large-scale release of crude oil reserves. Some market participants believe that logistical bottlenecks such as pipeline capacity may limit the scale of the release of strategic crude oil reserves, which means that the actual release of strategic crude oil reserves in the United States in the next six months may be lower than the planned 180 million barrels.
[German oil prices jumped about 20% in March, which will continue to hit consumers for more than two years]
A roughly 20 percent rise in German oil prices in March will hit consumers in Europe's largest economy for more than two years, a study by the German Institute for Economic Research (DIW) showed on Wednesday. German inflation jumped 7.3 percent in March from a year earlier, the highest in more than 40 years, as prices for natural gas and oil surged following Russia's invasion of Ukraine.
Even if oil prices fall again, this jump in oil prices will keep consumer price growth above 1.5 percent for more than two years, according to the study, first published by Handelsblatt. Other effects of the war, such as sanctions, and general post-pandemic economic development were not taken into account. Study co-author Malte Rieth told the paper it was questionable whether the oil embargo imposed on Russia would have a strong inflationary impact. It is conceivable that the impact will be limited because without Russia, there are other oil suppliers vying for the market. "
[Iraq's Kurdish capital hit by three rockets]
According to the news released by the Iraqi security department, three rockets hit Erbil, the capital of the Kurdish Autonomous Region in northern Iraq, around midnight on the 6th local time. One of the rockets landed near a local oil refinery. cause any property damage or personal injury.
[The S&P 500 index reversed the decline and closed higher in late trading]
The S&P 500 closed higher on Thursday, with Pfizer and Tesla driving a late-day rebound, while investors focused on the situation in Ukraine and the prospect of more aggressive Fed action. Shares in electric car makers Tesla and Microsoft rose 1.2% and 0.6%, respectively, helping to lift the S&P 500 and pushing the Nasdaq up slightly. Pfizer jumped 4.3 percent, also supporting the S&P 500 after the company said it would buy privately held ReViral Ltd. for as much as $525 million in less than six months. The second acquisition, aimed at expanding its drug portfolio.
The S&P 500 was down for most of the day, but rebounded near the close. "We don't know how the Ukraine issue will be resolved," said Dennis Dick, a trader at Bright Trading LLC. "We also don't know how the hawkish Fed will affect the economy, much less whether they can lead the economy to a soft landing, which leads to The market is up and down, and if you follow the trend, you get lost in the market because the market is volatile at the moment.”
Large-cap growth stocks came under pressure earlier this week after comments from Fed policymakers and minutes from the Fed's March meeting suggested a quick withdrawal of stimulus implemented during the pandemic. "Investors continue to realize that the Fed is not yet at its most hawkish and that we are going to err on the side of what they want to do more to keep inflation under control," said Anastasia Amoroso, chief investment strategist at investment markets firm iCapital Network. Members currently see an 88.9% chance the Fed will raise rates by 50 basis points at its meeting next month.
U.S. companies will begin reporting first-quarter results in the coming weeks, and banks will officially kick off the earnings season next week. Analysts on average expect first-quarter earnings for S&P 500 companies to rise 6.4%, according to I/B/E/S data from Refinitiv. It grew more than 30% in the fourth quarter of last year.
Jake Dollarhide, chief executive of Longbow Asset Management, said, "As we enter the peak of earnings season, I expect volatility to be very prominent, and we may see strong results that exceed the highest expectations, but the forecast for the next 12 months will be lower. weak."
In general, oil prices fluctuated lower in the short-term due to the impact of the epidemic and the release of crude oil reserves by the IEA, but the decline was limited due to the new EU sanctions on Russia; oil prices may focus on Russia's response to EU sanctions in the short-term. As the weekend approaches, pay attention to geopolitics Uncertainty risk of the situation.
At 08:10 GMT+8, U.S. crude oil is now at $96.71 a barrel.
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