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Market News Crude oil trading reminder: Russia-Ukraine negotiations have been suspended! Finland and Sweden accelerate the pace of "joining the treaty", and the escalation of geopolitical tensions helps oil prices rise

Crude oil trading reminder: Russia-Ukraine negotiations have been suspended! Finland and Sweden accelerate the pace of "joining the treaty", and the escalation of geopolitical tensions helps oil prices rise

During the Asian session on May 16, U.S. oil continued to rise and is now at $111.25/barrel, hitting a record high of $111.57/barrel in the morning since March 28; The European Union embargoes Russian oil, and supplies will tighten. In addition, Finland and Sweden accelerate the pace of joining NATO, escalating geopolitical tensions, and oil prices may maintain a bullish trend this week.

2022-05-16
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In Asian hours on Monday (May 16), U.S. crude oil continued its rally and is now at $111.25 per barrel, hitting its highest level since March 28 at $111.57 per barrel in the morning; as U.S. gasoline prices soared to a record high, and investment Some fear that supplies will be tightened if the EU embargoes Russian oil, and geopolitical tensions are escalating as Finland and Sweden move faster to join NATO.



In the days, the focus will be on the speech of the Federal Reserve Williams and the news related to the geopolitical situation in Europe.

Bullish factors affecting oil prices


[U.S. gasoline prices hit record highs]

U.S. gasoline futures rose to record highs, with gasoline inventories falling for the sixth straight week last week. That pushed the gasoline crack spread to its highest level since a record in April 2020, when U.S. crude futures settled in negative territory.

"(U.S.) gasoline inventories haven't increased since March," said Robert Yawger, executive director of Mizuho Energy Futures, noting that gasoline demand will climb as the U.S. enters the driving season from the Memorial Day holiday weekend.


Gasoline and diesel prices at U.S. gas stations rose to record highs of $4.43 a gallon and $5.56 a gallon, respectively, on Friday, the Automobile Club AAA said.

[Putin says Russia-Ukraine talks have actually been suspended]

According to RIA Novosti, on the 14th local time, the Russian President informed Finnish President Niinisto that the Russian-Ukrainian talks had effectively been suspended due to the lack of interest in Kyiv for serious and constructive dialogue. On the same day, the President of Finland called Putin, and the two sides talked about the situation in Russia and Ukraine and Finland's accession to NATO.

[Finland and Sweden accelerate the pace of "joining the treaty", and the Russian side has intensively issued "warnings"]

Russian President Vladimir Putin had a telephone conversation with Finnish President Niinisto on the 14th. The move marks another dimension in Finland's application to join NATO.

Recently, with the increasingly loud voices of Finland and Sweden joining NATO and NATO's claim of "warm welcome", Russia's strategic space will be squeezed again, and concerns about European and even global security and stability have once again affected the nerves of the international community.

On the 14th, Russian Foreign Minister Sergey Lavrov said at the 30th annual meeting of the Foreign and Defense Policy Committee that on security issues, the European Union is moving closer to NATO and is attached to NATO, while the latter's global ambitions are increasingly manifested. NATO claims responsibility for global security, especially in the Indo-Pacific, which means its defenses will extend to the rest of the world.

On the 14th, Russian Deputy Foreign Minister Glushko told the media that Moscow will respond to the possible consequences of further expansion of NATO after "a thorough and prudent analysis of all factors affecting the security situation in the region", rather than acting on a whim. He believes that the accession of Finland and Sweden to NATO is not in line with their national interests, the interests of maintaining European security and stability, nor the interests of stability in the region, and will only lead to the militarization of the northern region.

[Some applications for natural gas transfer to Europe via Uzbekistan were rejected by Uzbekistan]

On May 14, Gazprom spokesman Sergei Kuprianov said that the company supplied 64.9 million cubic meters of natural gas to Europe via the Ukrainian gas metering station Sudzha. The application of the Hlanivka transfer station to supply natural gas to Europe was rejected by the Ukrainian side.

"A full EU oil embargo could reduce Russian oil production by around 3 million barrels per day, which would completely disrupt and ultimately alter global trade flows, causing market panic and extreme price volatility," said Rystad Energy analyst Louise Dickson.

[US stocks rebounded strongly]

U.S. stocks closed higher on Friday, ending a wild week of volatility, as relief from signs of peaking inflation offset concerns that Fed tightening could tip the economy into recession.

A rebound in tech giants and tech-related stocks led the gains. Technology stocks have sold off in recent sessions as benchmark bond yields climbed and investors worried that the Federal Reserve could raise interest rates more than expected.

Despite Friday's gains in U.S. stocks, the S&P 500 and Nasdaq posted their sixth straight weekly loss, the longest losing streak for the S&P 500 since the fall of 2012, and the Nasdaq's worst since the spring of 2011. Long streak. The Dow recorded its seventh straight weekly decline, its longest losing streak since the late winter of 1980.

“Is this a dead cat rally? Or are investors acknowledging that the sell-off is overdone, as I think? I wouldn’t be surprised if there’s another one to two weeks of decline,” said Oliver Pursche, senior vice president at Wealthspire Advisors in New York. , but you have to ignore the indices and look at the market's support, and what we're seeing is that some of the hard-hit high-quality stocks are really bouncing back."

Over the past six trading days, the Labor Department has released four economic reports - wage growth, consumer price index (CPI), producer price index (PPI) and import prices, all showing inflation peaking in March, raising concerns about the Fed This is welcome news for market participants fighting inflation that could trigger a recession with aggressive interest rate hikes.

Federal Reserve Chairman Jerome Powell reiterated the central bank's determination to fight inflation, but said he believed the economy could avoid a severe downturn. Powell was approved for re-election by the U.S. Senate on Thursday.

Peter Tuz, president of Chase Investment Counsel, said Powell "demonstrated humility and seriousness in his commitment to getting inflation under control, even though he conceded that it would be a little painful."

The first-quarter earnings season is in its final stages, with 458 companies in the S&P 500 already reporting. According to Refinitiv data, 78% of the companies beat market expectations. Analysts now expect total S&P 500 earnings for the first three months of the year to have risen 11.1% from a year earlier, according to Refinitiv data, up from a 6.4% rise at the end of the quarter.

[Iran does not intend to compete with Russia in the oil market]

According to the Russian Satellite News Agency on the 15th, Mohammad Marandi, an adviser to the Iranian delegation participating in the Vienna negotiations, said that even if the West reaches a nuclear deal with Iran, Tehran does not intend to compete with Russia in the oil market.

"Iran will not compete with Russia in the oil and gas market at all," Marandi said. "Iran has had its own fixed customers for a long time. Now Iran is exporting at full capacity, and now it is producing and selling oil at full capacity. nuclear deal, then there may be some uptick in capacity and exports. Even then, Iran will never compete with Russia in the oil market.”

Negative factors affecting oil prices



[EU officials say Iran nuclear talks have been restarted]

Borrell, the EU's high representative for foreign affairs and security policy, said on the 13th that the EU Coordinator and Deputy Secretary-General of the European External Action Agency Mora Mora has ended his visit to Iran. Mora's visit has achieved better than expected results. Negotiations between the parties to the JCPOA have restarted.

Borrell said at a press conference on the sidelines of the G7 foreign ministers meeting in Germany that the Iranian nuclear talks had previously encountered obstacles, but these obstacles have now been removed, which means that the Iranian nuclear talks may reach a final agreement.

Borrell said that due to differences in Iran's Islamic Revolutionary Guard Corps and other parties, Iran's nuclear talks have been stalled for two months. The EU believes it cannot continue like this, and Iran's response to it was "enoughly positive".

[Two more monkeypox cases confirmed in the UK]

Two more people in England have been diagnosed with the monkeypox virus, the UK Health and Safety Authority said on May 14, local time. The two patients lived in the same house and health authorities are investigating the source of their infection but have determined they are not related to the previously diagnosed patient.



Overall, gasoline prices in the United States have hit a record high, tensions in the Russia-Ukraine conflict may escalate, and uncertainty about the geopolitical situation in Europe has increased, boosting oil price bulls, and oil prices may maintain a bullish trend this week.

At 07:00 GMT+8, U.S. crude oil is now at $111.25 a barrel.
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