Showing posts from April 25, 2021

Crude Oil: prices fall as Eurozone enters double-dip recession; setback is temporary, though

  Oil price fell on Friday, ending the positive trend during the first four days of the week, perhaps due to the unexpected news from the Eurozone that the latter has slipped into double-dip recession; the block has entered the second recession in less than a year, the data confirmed. Europe is still reeling from the third lockdown and it has taken its toll on the consumer spending. Since the block could not get its vaccine strategy right at the end of the second wave, there were steep spikes in infections throughout the block; with the third lockdown that lasted a few weeks unlike the previous lockdown, however, France, Italy and even Germany appeared to have controlled the spread of the epidemic. By contrast, both the US and China recorded impressive growth figures that boosted the confidence of the investors; they were 6.4% and 18.3% respectively. With the news of these figures, the crude oil markets ignored the plight of world’s two major crude oil consumers – India and Japan

Crude Oil Markets: bullish sentiment returns with strong economic data from the US and China

  Oil price is turning bullish despite the surge in Coronavirus infections in India, Japan, Brazil and Turkey. The devastating consequences, especially in India, are there for all to see. Although crude oil markets showed a significant anxiety over the development in India and Japan, the world’s third and fourth largest buyers of crude oil, last week, the mood turned positive at the beginning of this week; the trend continues steadily at the moment. At 0843 GMT, Brent rose 49 cents, or 0.7 percent, to $67.76 a barrel and US West Texas Intermediate crude was up 43 cents, or 0.7 percent, at $64.29 a barrel.   The positive outlook stems from the fact that the economic recovery in the US is well on track with unemployment figures are falling. The encouraging news from the world’s largest economy appears to be the main driving force behind the oil rally. Oil investors anticipate a rebound in demand of crude oil in proportion to the promising economic figures. In China, meanwhile,

Saudis to sell 1% stake in Saudi Aramco; OPEC+ ministerial meeting cancelled; Oil price bounces back

  As the OPEC+ in a surprise move cancelled the ministerial meeting at the eleventh hour, by coincidence, Prince Mohamed bin Salman, the crown prince of Saudi Arabia known as MBS, gave a rare interview to a Saudi journalist on Tuesday. The crown prince heaped praise on the journalist at the outset, saying that the journalist in question was his favourite. In the interview that lasted longer than an hour, the crown prince touched upon a wide range of subjects that really matter to the Kingdom in the years to come. One of the subjects that he discussed in the interview, which caught global attention, was his plan to sell 1% stake in the world’s largest oil company, Saudi Aramco that could not stem the tide of cumulative impact of the Coronavirus pandemic last year. “There are talks now for the acquisition of a 1 percent stake by a leading global energy company in an important deal that would boost Aramco’s sales in … a major country,” he said in the interview, while leaving the d

OPEC+ Meeting Tomorrow: is outcome, a foregone conclusion?

The next monthly, virtual meeting of the members of the OPEC+ is going to take place tomorrow. Unlike in the run up to the previous meetings, the enthusiasm among the analysts about the latest meeting is somewhat subdued, perhaps sensing that the outcome is just a foregone conclusion. At the end of its last meeting, OPEC+ estimated a steady growth in demand of crude oil for 2021, reaching 5.88 million bpd; The OPEC+ joint technical committee (JTC) still maintains the forecast despite the unexpected rise in Coronavirus infections in two of its major clients – India and Japan; the situation in Brazil is a serious concern as well. The task assigned to the JTC is monitoring the market fundamentals and of course, the compliance by the members in the output quota given to individual countries. So far, according to Reuters, the compliance is overwhelmingly positive. At present, the demand of crude oil has fallen due to the catastrophic outbreak in India; although, the situation is not t

Wheat price goes up as oil price falls, being true to old cliche: one man's loss is anothre man's gain!

  With the unprecedented surge in Coronavirus infections in India, exacerbated by the lack of medical oxygen in hospitals and the scarcity of beds, the oil price fell on Monday, having been subjected to the inevitable volatility in the markets. Making matters worse, the pandemic situation in Japan also has become a serious cause for concern: some prefectures are in lockdown, covering a quarter of the population, including the major cities such as Tokyo and Osaka. As the word’s third and fourth crude oil importers struggle to cope with the new danger, markets sentiment has gone down considerably: both WTI crude and Brent crude fell on Monday, reflecting the evolving sentiments in the crude oil markets. In addition, the anticipated increase in the output by the OPEC+ in May must have played some role in the market sentiments too. In India, meanwhile, there is a significant drop in activities at the pumps; the prices of petrol and gas have not changed as demand has plummeted. As

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