Showing posts from April 11, 2021

Oil Price: the weekly price is up with strong Chinese and US economic data

  Oil price recorded a rise this week, having been on a downward trend for weeks. The main pushing factor has been China’s impressive economic growth, coupled with its ability to control the pandemic, despite being the epicentre of the catastrophe, last year. All indications are that it’s full steam ahead; the Chinese refineries are back in business with heightened activity while the regular maintenance phase is slowly coming to an end. The other encouraging factor has been the strong US economic data; the significance drop in US crude oil inventories in the past week and the accelerated vaccine rollout are nurturing the positive sentiment in the markets. In Asia and Europe, however, there are still serious concerns about the resurgence of the number of infections; the slow pace of vaccine rollout does not help calm the nerves of the investors. In India, for example, the situation is painting a grim picture: the major cities are staring into an abyss of lockdowns; the demand

China and Japan get the crude oil demand on track; pandemic concerns in Asia remain serious, though

  Despite the rising infections across Asia, especially in India, the crude oil imports have been rising in the region, according to the latest news from Singapore. According to the same source, there have been heightened activities at refineries in both China and Japan in proportion to the growth prospects of the countries in question. China, that was in a buying spree at the height of the pandemic last year, slowed down the import slightly at the beginning of this year, perhaps reeling from the aftermath of pandemic. A few weeks ago, it was the maintenance phase of its refineries. With that phase coming to an end soon, they have increased the import of crude oil substantially to meet demand of the consumers. In India – and in the Asian region for that matter – the resurgence of the pandemic continues unabated with alarming number of daily infections; on Friday, the daily infections in India were more than 200,000. Judging by the developments across the world in the past yea

Oil Price: planes are back in the skies; jet fuel consumption picks up

  According to the latest data from the EIA, US Energy Information Administration, the US crude oil inventories recorded their biggest drop in two months – a fall by 5.89 million barrels. With that, three major global agencies that analyse all aspects of the realm of energy finally emerged with a single voice with regard to the future demand of crude oil; it is steadily recovering and approaching the pre-pandemic level. There is enough evidence to be optimistic: the combined growth in China and the US is encouraging; the planes are back in the skies in large numbers, slowly reaching the pre-pandemic level; the jet fuel consumption has picked up, having been in stagnation for months. Although the crude oil price slightly fell on Thursday, in light of the latest encouraging data, there is no cause for anxiety; the price will pick up again as the sparks for the price-engine are there for all to see. Despite the emergence of feel-good factors, the situation in India is a major conc
  With the next OPEC+ ministerial meeting just two weeks away, OPEC+ expressed optimism about the future demand of crude oil, having maintained what Saudis used to call, cautious optimism, for months. Citing the latest growth figures from China, along with its export and import figures, the organization estimates that the demand of crude oil will increase by 5.95 million bpd in 2021. In addition, the OPEC+ also takes into account the rise in the global growth from 5.1% to 5.4% as well as the estimated fall of the US oil stockpiles for 3 weeks in a row. Although the OPEC+ did not pay much attention to the rising pandemic level in Europe, Asia and especially in India, seasoned oil analysts are not prepared to sweep them under the carpet as something irrelevant. As far as Europe is concerned, the vaccine rollout has not been as effective as that of the United Kingdom, due to several factors ranging from those stem from petty politics to stubborn individual refusal to get ‘foreign

Weaker US dollar pushes the oil price up - modestly

  The oil price, which entered the green zone on market charts on Monday, continues to stay that way, but with relatively modest increases in price. The momentum that we saw on Monday, especially in the Asian markets, has clearly slowed down. Analysts were bracing themselves for a big impact on the markets in general and oil in particular in the wake of the remark made by Jay Powell, the Chair of Fed Reserve, on April 4; he mentioned that the worlds’ biggest economy is reaching a ‘reflection point’ – a period of accelerated growth followed by something akin to a stagnation. Since oil is still in the green territory on Tuesday, it’s worth looking at the strength of the US dollar to see whether it was the latent factor that is behind the rise in oil price, despite that being pretty modest. The relationship between the strength of the US dollar and the oil price has long been established; the stronger the dollar, the lower the oil price becomes. At present, the dollar has weakened

Crude Oil Price: did 'inflection point' remark by Jay Powell, Fed Reserve Chief, affect the markets?

  Those of us who are very much familiar with the terms such as inflation, growth and even the dreaded recession from economists during volatile periods, heard a less-familiar term on April, 4, from Jay Powell, the Chair of Fed Reserve. Mr Powell, speaking on CBS’s 60 Minutes programme, said that the US economy is reaching what he called, ‘ inflection point’ . No sooner had it become the focal point of his interview than media buzz continued hovering over it like a malfunctioning toy drone. Inflection point or point of inflection is more of a math term than that of an economic, although the latter may have borrowed it from the former as it got some ingredients for a formidable soundbite. In the field of calculus in math, it is a point on a curve where the gradient or slope is zero with the same thing on either side of the point having the same sign – either positive or negative. With three simple steps in differentiation, a branch of calculus, it is easy to determine whether

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