During the Asian session on Tuesday (June 28), U.S. oil rose slightly and was now at $110.73 per barrel. G7 vowed to impose more sanctions on Russia, and Libya and Ecuador's political crises affected crude oil supply, and oil prices were boosted.
html In the past 4 days, we will focus on the initial monthly monthly rate of U.S. wholesale inventories in May, the U.S. Conference Board Consumer Confidence Index in June, and EIA data; the changes in U.S. API crude oil inventories for the week ending June 24 will be announced at 4:30 on Wednesday.
Positive factors affecting oil prices
[G7 explores ways to limit Russian natural gas prices]
According to people familiar with the matter, Group of Seven (G7) leaders will instruct ministers to explore the implementation of a price ceiling for Russian natural gas. The mandate will be announced at a three-day summit that ends on Tuesday. Leaders are also expected to mention mechanisms to cap Russian oil prices in their final communiqué. Oil consultant Andrew Lipow said, "I think if they were to put a price cap on the sale and purchase of Russian oil, I have a hard time imagining how that would be implemented." The G7 vowed to stand with Ukraine "as long as necessary" .
[ OPEC+ lowers its forecast for 2022 oil market oversupply to 1 million barrels per day from 1.4 million barrels per day]
OPEC+ lowered its forecast for 2022 oil market oversupply from its previous estimate, according to a report seen by Reuters. 1.4 million barrels per day was revised down to 1 million barrels per day; the report was prepared for the OPEC+ Joint Technical Committee meeting scheduled for Tuesday.
[Political crisis affects crude oil production]
In addition, Libya’s National Oil Company hinted that oil supply may be affected due to the worsening political crisis; Ecuador’s Energy Ministry said that political unrest may lead to the country’s faster suspension of oil production.
According to AFP reported on June 27, the Ecuadorian Ministry of Energy stated in an announcement on the 26th: "If demonstrations and road closures continue, Ecuador 's oil production will be suspended within 48 hours due to damage to public facilities. , oil well occupation and road closures, etc., hindering oil transportation and the supply of diesel necessary for mining activities," said Dennis Kissler, senior vice president of the trading department of BOK Financial. As OPEC+ meets this week, "markets continue to be on edge."
[U.S. durable goods orders in May beat expectations]
U.S. durable goods orders rose more than expected in May, indicating that despite rising interest rates and heightened concerns about the economy, U.S. durable goods orders rose more than expected in May. corporate investment in remains strong. Data released by the U.S. Department of Commerce on Monday showed that orders for durable goods increased by 0.7% in May; the increase in April was revised to 0.4%. The above figures are not adjusted for inflation. Orders for core capital goods, excluding aircraft and military supplies, rose 0.5%, compared with a 0.3% increase in April.
The median forecast among economists surveyed by Bloomberg was for orders for all durable goods to rise 0.1% and orders for core capital goods to rise 0.2%. The broad-based pickup in durable goods orders suggests capital investment remained firm in May even as recent manufacturing data began to show signs of weakness. Some regional Fed indicators of economic activity worsened or even contracted in June, including the New York Fed and Philadelphia Fed districts.
The S&P manufacturing output index also shrank due to high prices, weakening demand and shortages of raw materials. The same goes for new orders. The economic outlook has darkened, with some companies becoming increasingly cautious following aggressive policy actions by the Federal Reserve and rising odds of a recession. At the same time, Americans are spending less on goods.
Shipments of core capital goods, a figure used to help calculate equipment investment in the official gross domestic product report, rose 0.8% for the second month in a row. The first estimate of GDP for the second quarter will be released at the end of July. Orders for durable goods, excluding transportation equipment, also rose 0.7% in May. The report also showed that unfilled orders for all durable goods rose 0.3% and inventories rose 0.6%.
Negative factors affecting oil prices
[ Iran nuclear talks will be held in Doha on Tuesday]
Iran's official Islamic Republic News Agency quoted people familiar with the matter as saying that the next round of negotiations to restart the Iran nuclear deal will be held on Qatar on Tuesday. Held in the capital Doha. Earlier, Iran's semi-official news agency Tasnim said the country's chief nuclear negotiator Ali Bagheri Kani would travel to Qatar on Tuesday to discuss lifting sanctions in exchange for salvaging the 2015 deal.
[ U.S. stocks lower as investors rebalance positions at the end of the quarter]
U.S. stocks fell on Monday after a strong rebound last week, as investors rebalanced portfolios in the final days of the quarter. The S&P 500 index struggled to find direction for most of Monday's trading day, amid expectations of a volatile market at the start of the week and a lack of confidence among investors that the market had bottomed. Technology stocks dominated Nasdaq 100 index underperformed the broader market . Fawad Razaqzada, market analyst at
CityIndex and Forex.com, said there will be many fund managers adjusting their portfolios this week, which could mean more volatility. Betting on a bear market that has bottomed out can be a costly mistake, and shorting on isn't as profitable as it would be if the market were at higher levels.
Kristen Bitterly of Citi Global Wealth Management believes that the market will not reverse direction until investors are convinced that the U.S. economy has avoided recession, "We are not there yet." There is a growing consensus among Wall Street's biggest names that optimism about the company may be in desperate need of a reality check. Analysts expect profits at companies in the S&P 500 to rise 10.7%, up from estimates of 10% a month ago and 8.7% earlier this year, according to Bloomberg Intelligence.
[Dallas Fed manufacturing index fell to lowest since May 2020]
A measure of manufacturing activity in Texas fell to a two-year low in June, in line with recent economic reports from other Fed jurisdictions. In line with this, the latter shows that producers are facing high inflation, weak demand and supply problems. The manufacturing activity indicator fell to -17.7, the lowest since May 2020, from -7.3 the previous month. Readings below zero indicate a higher share of respondents who believe the situation has worsened.
The Dallas Fed's orders, shipments and production indicators also all fell to their lowest levels since the early months of the outbreak. A measure of expected business activity over the next six months fell to -26, the lowest since April 2020. Inflation and wage measures have declined but remain elevated.
[France is facing a new wave of epidemic]
According to data released on the 27th, France is facing a new wave of new crown epidemic. French Health Minister Bourguignon asked that people resume wearing masks on public transportation that day.
According to French official data, there were 164,828 new confirmed cases in France from the 25th to the 27th; the average number of new confirmed cases in France in a single day has now risen to 71,000, a new high since the end of April. The incidence rate of COVID-19 in France continues to rise. The current incidence rate is 693 infected people per 100,000 residents, an increase of 50% compared to the previous week. The COVID-19 test positivity rate rose to 27.5%, an increase of 18.2% compared to the previous week.
Overall, investors are paying attention to the progress of the G7 meeting on Russian crude oil sanctions. In addition, the political crises in Libya and Ecuador have affected production. Oil prices have strong short-term bullish momentum, but they also need to pay attention to EIA data, Iranian nuclear negotiations and the upcoming OPEC meeting.
This article comes from Huitong.com
