Best positive week for oil since August and threats from the United States to Russia
Best positive week for oil since August and threats from the United States to Russia: Last week ended with optimism after the reassuring news of the Omicron strain that it will not be as dangerous as expected, pushing oil and US indices into the Green Zone.
Evest follows market developments in the following report.
Topics:
Asian and European exchanges are declining and positive performance on Wall Street
US life insurance payments are rising at the fastest pace in 100 years
Oil ends the week with the highest gain since August
Asian and European exchanges are declining and positive performance on Wall Street
Asian indices declined on Friday, with Japan’s Nikkei index declining 1%,
China’s Shanghai Composite index declining 0.2%, and Hong Kong’s Hang Seng index declining 1.2%.
Exchanges in Europe also declined, with DAX, CAC40 and FTSE falling by 0.1-0.4%.
While the indices’ performance in the United States of America was positive.
According to the United States Department of Labor,
the Consumer Price Index (CPI) in the United States rose in November by 6.8% on an annual basis,
to the highest level since 1982.
Thus, inflation accelerated from 6.2% the previous month and was in line with the expectations analysts surveyed by Bloomberg.
Inflation-boosting data enhance expectations for faster liquidation of the FRS asset buyback program, despite risks associated with the Omicron strain.
On the other hand, market concerns about the economy of the People’s Republic of China,
remain under the problems of the major developers in the country.
International rating agency Fitch Ratings has lowered the default rating of the long-term foreign currency source of Chinese developer Kaisa Group Holdings Ltd. to a” “limited default” level “C.
In addition, the agency assigned a “limited default” rating to the country’s main development company China Evergrande.
US life insurance payments are rising at the fastest pace in 100 years
Payments by American life insurance companies for the deaths of insured persons in 2020 increased by 15.4% compared to the previous year – the fastest pace since the Spanish flu pandemic.
According to the American Council of Life Insurance Companies (ACLI), mainly driven by the Covid-19 pandemic.
By comparison, when the “Spanish flu” swept the world in 1918,
insurance companies’ payments for the death of the insured jumped 41%.
Covid-19’s impact on life insurance was less severe than expected in the early days of the epidemic,
with many victims of the coronavirus being elderly, and insurance contracts providing for smaller payments.
In 2019, US life insurance companies paid $ 78.36 billion for the deaths of insured persons.
Life insurance payments may be higher in 2021,
as the delta strain of coronavirus that emerged this year caused an increase in mortality among the younger population.
Therefore, if 80% of people who died in the United States from Coronavirus infection in 2020,
were older than 65 years, their proportion in 2021 fell to 69%,
and the mortality rate among people aged 45-64 years is 25%.
US employers usually provide life insurance to employees,
and they often purchase the insurance themselves, according to the Wall Street Journal.
According to ACLI, the pandemic has also sent US life insurance policy sales growth to a 25-year high.
Total insurance industry assets increased in 2020 by 7.7% to $8.2 trillion.
Joe Biden threatens Russia with serious economic consequences in the event of an incursion into Ukraine
US President Joe Biden said on Saturday he had told Russian President Vladimir Putin ,
that Russia would pay a “heavy price” and face serious economic consequences if it invaded Ukraine.
Biden told reporters that the option of sending the United States ground combat troops to Ukraine ,
in the event of a Russian invasion “was never on the table,
” although the United States and NATO would be required
to send more troops to eastern NATO neighbors to strengthen their defenses.
“I made it very clear to President Putin that if he moved towards Ukraine,
the economic consequences for his economy would be devastating,”
he said after comments about the deadly hurricanes that hit the United States on Friday.
Biden, who spoke with Putin on the phone for two hours last week,
said he had made it clear to the Russian President that Russia’s position in the world would change “significantly” in the event of an incursion into Ukraine.
Oil ends the week with the highest gain since August
Oil prices surged on Friday and ended the week with the highest gains since August,
owing to slighter concerns about the potential consequences of the new strain of the Omicron virus.
There are no signs that Omicron’s emergence will lead to a decline in oil demand, which assures the market. However, concern persists: Data on the increase in Covid-19 infections,
as well as the imposition of new quarantine restrictions in many countries,
led to market declines on Thursday.
Brent crude futures for February on the London Futures Exchange rose by $0.71(0.95%),
to $75.13 per barrel.
By this time, January futures for West Texas Intermediate crude rose in the New York Mercantile Exchange (NYMEX) by $0.84 (1.18%), to $71.78 per barrel.
Since the beginning of this week, Brent crude has risen by 7.4%,
West Texas Intermediate crude has risen by more than 8%,
and the weekly appreciation in the value of both grades is likely to be the highest since the end of August.
The debt crisis in the Chinese real estate sector has put some pressure on the oil market,
according to Market Watch.
Experts fear that the default of companies in this sector will
weaken the growth of the economy of the People’s Republic of China,
leading to a decline in oil demand in the country.