Oil rises and Asian indices decline despite strong Chinese data

Oil rises and Asian indices decline despite strong Chinese data

Oil rises and Asian indices decline despite strong Chinese data

Oil rises and Asian indices decline despite strong Chinese data: Oil is trying to take advantage of OPEC’s recent decisions, to offset losses suffered in the past few weeks, as the situation has been precarious due to successive increases in US inventories. 

Evest follows the markets situation in the following report.


Oil rises amid supply shortages

Saudi Aramco

China’s Foreign Trade Balance Surplus Exceeds Expectations

China’s exports to Japan

Asian indices are in the Red Zone and strong job data support Wall Street

Jerome Powell


Oil rises amid supply shortages

Oil prices rose on Tuesday amid concerns that the market is at risk for supply deficiency due to the reluctance of OPEC +
countries to increase production above previously planned levels.

The OPEC + ministers unanimously decided last Thursday to continue following the plan outlined earlier,

despite calls by US President Joe Biden to accelerate production increases. 

OPEC + has been rising production by 400 thousand barrels per day on a monthly basis since July in order to offset the 9.7 million barrels per day
taken under the peak of the Covid-19 pandemic and meets monthly to assess the market situation.

At the end of last week, Saudi Aramco, the Saudi state oil company, announced that it would raise oil prices of all grades in December for Asian
, American, Northwestern European and Mediterranean buyers.

The cost of Brent crude futures for January on the London Stock Exchange ICE Futures on Tuesday is $83.71 per barrel,
$0.97 (1.17%) higher than the closing price of the previous session. 

As a result of Friday’s trading, these futures rose by $2.2 (2.7%) – to $82.74 per barrel.

The price of West Texas Intermediate crude futures for December in electronic trading on the New York Mercantile Exchange (NMX) is $82.31 per barrel,
$1.04 (1.28%) higher than the final value of the previous session. 

At the close of Friday’s trading, these futures rose by $2.46 (3.1%) to $81.27 per barrel.

Overall, over the past week, the price of Brent crude fell by 1.2%, that of West Texas Intermediate – by 2.8%.

Saudi Aramco

Saudi Aramco will increase oil prices supplied to Asia by $1.1-2.8 per barrel in December, and the United States – by $0.5 per barrel,
for northwest European countries – will increase by $1-3.3 per barrel, for Mediterranean countries by $1.1.3 per barrel.

Mike Mueller, chairman of Vitol Group, the world’s largest independent oil trader, said OPEC + and Saudi Arabia, in particular,
are unlikely to change their approach to restoring production volumes. 

According to Bloomberg, Mueller added: “Saudi Arabia has raised oil prices above all expectations.”

For her part, US Energy Secretary Jennifer Granholm said on Sunday that she was still considering selling oil from the Strategic Petroleum Reserve (SPR).
and would carefully assess US oil reserves data, which will be released this week.


China’s Foreign Trade Balance Surplus Exceeds Expectations

China’s foreign trade balance surplus rose to a record high in October, exceeding experts’ expectations.

According to the General Customs Administration of the People’s Republic of China, last month’s foreign trade surplus was $84.54 billion,
compared to $57.32 billion in the same period the previous year and $66.76 billion in September. 

Analysts polled by Wall Street Journal projected $62.74 billion for this index.

Export volumes increased by 27.1% compared to October last year – to $300.22 billion, and imports increased by 20.6%, to $215.68 billion.

Experts predicted an average increase of 22.6% in exports and 27.5% in imports.

China’s exports are growing steadily under strong global demand for domestic companies before the Christmas season,
as well as easing the country’s energy crisis. Analysts say weaker-than-expected import growth rates indicate weak domestic demand.

Exports from China to the United States increased by 22.7% to $53.77 billion in October, imports by 4% to $13.02 billion and the U.S. trade surplus by 30% to $40.75 billion.

China’s exports to Japan

China’s exports to Japan increased last month by 16.3%, to South Korea – by 33.1%,
to Australia – by 22.3%, to ASEAN countries – by 18% and to the European Union – by 44.3%. 

The supply of rare earth minerals abroad rose by 89%.

Japan’s imports increased by 9.9%, from South Korea – by 22.3%, from Australia – by 24.3%, from the United States – by 4.6%, a
nd from ASEAN – by 23.1%. EU imports fell by 0.7% in October.

China increased its coal purchases dramatically last month – by 96.2%, and natural gas – by 24.6%.

Meanwhile, oil imports fell by 11.2%, crude copper – by 33.6%, and soybeans – by 41.2%.

China’s foreign trade balance surplus was $513.74 billion from January to October 2021, compared to $373.92 billion the previous year. 

Exports for 10 months this year rose by 32.3%, to $ 2.7 trillion, exceeding the index for the whole of 2020.


Asian indices are in the Red Zone and strong job data support Wall Street

Stock indices in Asia and the Pacific show negative dynamics on Monday: Japan’s Nikkei 225 fell by 0.17% and China’s CSI by 300- 0.05٪.

US S&P 500 index’s futures fell also by 0.21%.

US stocks rose to new records on Friday against the backdrop of stronger-than-expected US labor market data. 

The number of jobs in the US economy increased by 531 thousand in October, at a maximum rate of three months.

According to the adjusted data, the figure rose in September 312 thousand, not 194,000, as previously reported.

The unemployment rate in the United States fell to 4.6% in October,
the lowest level since March 2020, down from 4.8% in September.

Experts expected an average increase in the number of jobs in October of 450 thousand ,
and a decrease in the unemployment rate by an average of 4.7%.

Labor market situation is a key factor in FRS’ decisions on the future level of the basic interest rate.

Jerome Powell

Federal Reserve Chairman Jerome Powell said at a press conference following the November 2-3 meeting of the U.S. Central Bank
that job opportunities could be maximized in the US economy by the second half of 2022.

At the last meeting, the Federal Reserve decided to start reducing the asset buyback program.

The central bank said it would reduce asset buybacks in November by $15 billion and continue to reduce the program in December.


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