Continued Rise in Gold Prices: Gold prices remained near a two-month high during Monday’s trading,
following the release of economic data related to the US economy last week.
This strengthens the likelihood of the Federal Reserve cutting interest rates in June.
Gold prices remained near a two-month high during Monday’s trading,
following the release of economic data related to the US economy last week.
This strengthens the likelihood of the Federal Reserve cutting interest rates in June. The main factors affecting gold prices are developments in interest rates.
Prices moved upwards on Friday due to a series of overall economic data released in the United States,
encouraging the Fed to cut interest rates sooner than expected.
Gold prices rose by about $50 during the past week,
as price pressures eased according to the preferred inflation index
of the Federal Reserve and the US consumer confidence index.
OPEC+ Decisions to Extend Production Cuts Lead Oil Higher:
Oil prices witnessed an increase on Monday following OPEC+ member country’s
agreement to extend voluntary production cuts by 2.2 million barrels per day
during the second quarter of the year. This decision is in line with market expectations.
Brent crude futures rose by 28 cents or 0.3% to $83.83 per barrel,
while West Texas Intermediate crude futures rose by 20 cents or 0.3% to $80.17 per barrel.
These production cuts are expected to provide support to the oil
market amidst global economic concerns and increased production outside the OPEC+ group.
Russia’s announcement of additional export and production cuts surprised some analysts.
Oil prices received support in 2024 from escalating geopolitical tensions,
with increased Houthi attacks on commercial vessels in the Red Sea.
However, concerns about economic growth continue to cast shadows over the market.
Yen Hovers Around 150.00 Levels Awaiting Bank of Japan Governor’s Speech
The Japanese yen declined in Asian markets on Monday against a basket of global currencies,
continuing its losses for the second consecutive day against the US dollar
and moving away from its highest level in two weeks, amidst ongoing correction and profit-taking.
The yen is trading around a crucial level of 150 yen to the dollar,
with markets awaiting an important speech by Bank of Japan Governor Kazuo Ouda
on inflation developments in the country and the future of negative interest rates.
The dollar rose against the yen by about 0.2% to 150.21 yen,
from the opening price at the start of the day at 149.96 yen, and recorded its lowest level at 149.84 yen.
The yen lost about 0.1% against the dollar at the end of trading on Friday,
amidst correction and profit-taking, after hitting its highest level in two weeks the previous day at 149.20 yen.
Last week, the Japanese yen rose by 0.3% against the US dollar,
marking its first weekly gain in the past five weeks,
and the largest weekly gain in 2024 since late December 2023.
This weekly increase is a result of strong statements by a member
of the Bank of Japan’s monetary policy committee,
in addition to the decline in the yield of US ten-year Treasury bonds.
The global oil demand: Oil prices have clearly risen during recent trading sessions,
marking a monthly gain in January of 6.7% compared to December.
Here are the most significant events and factors that have impacted the markets.
They still expect global demand to increase by 2.2 million barrels per day,
reaching a total expected demand of 104 million barrels in 2024.
This figure is considered a record, based on their expectations for global economic growth of 2.7%,
up from last month’s forecast of 2.6%.
Demand from China, the world’s second-largest oil importer,
is also expected to rise, despite economic challenges and no signs of recovery yet.
They also pointed out that the US economy is strong,
and demand will increase starting from the second quarter of the current year.
Saudi Aramco
The CEO of Saudi Aramco stated that the expected demand for the current year
could reach 1.5 million barrels per day. As for the IEA,
it expects demand to be at 1.2 million barrels per day,
seeing the first quarter of the current year as a period of weak demand
and expecting a rise in demand in the coming period.
On the other hand, attacks on Russian refineries, tensions in the Middle East,
and disruptions in navigation in the Red Sea have increased concerns
about the impact on supplies and supported the rise in oil prices.
Rise in US Inventories
However, the increase in floating crude oil inventories by +8.3% is considered a negative factor for oil prices,
as inventories accumulate and affect the balance between supply and demand.
Traders are awaiting the US inventory report today, which will impact oil markets,
after rising by more than 5 million barrels last week, but the markets did not pay much attention.
Oil markets are expected to see volatility in the coming period,
but in general, factors supporting a significant rise in oil prices are more pronounced.
Current oil prices: West Texas Intermediate (WTI) crude oil prices reached $77.90 per barrel,
while Brent crude oil prices rose to $82.85 per barrel.
A new monthly report from the Organization of the Petroleum Exporting Countries (OPEC) was released on Wednesday,
providing forecasts for global oil demand rates in 2024.
OPEC maintained its previous expectations unchanged, projecting global demand to reach 2.2 million barrels per day.
Additionally, its forecasts for 2025 were left at 1.8 million barrels per day.
The report highlighted several key points, anticipating the Chinese economy to be a major driver of oil demand growth in the next 12 months,
attributed to the recovery in economic, manufacturing, and service sector activities in China.
It is also expected that the demand for all petroleum products in China will fully recover to pre-pandemic levels by 2025.
Forecasts indicate that global oil demand will reach 104.4 million barrels per day,
driven by strong demand for air travel, road transportation,
industrial construction, and agricultural activities in non-member countries of the Organization for Economic Cooperation and Development (OECD).
OPEC expects demand in that region to be around 2 million barrels per day in 2024 and 1.7 million barrels per day in 2025.
Oil demand in the OECD countries is expected to grow by 300 thousand barrels per day in 2024 and 100 thousand barrels per day in 2025.
OPEC maintained its global economic growth forecasts unchanged,
expecting global economic growth to be 2.6% in 2024 and 2.8% in 2025.
OPEC attributes these growth expectations to low inflation and anticipated interest rate cuts,
noting that geopolitical developments will not significantly impact global economic growth.
OPEC also anticipates an increase in momentum in global trade in 2024 and 2025,
despite potential challenges from geopolitical developments and international trade relations,
which may result in issues such as tariff imposition and difficulties in international shipping.
Regarding economic growth, OPEC expects Brazil, Russia, China, India, and the United States to achieve higher-than-expected growth.
However, it noted that elections in the United States and India could impact fiscal policies and, consequently, growth dynamics.
China, often referred to as the world’s manufacturing hub, boasts a formidable presence as one of the largest oil importers globally. This position grants China substantial influence over market demand, a crucial factor contributing to oil price fluctuations on a global scale. The ebb and flow of China’s economic health send ripples across the oil market, as shifts in its manufacturing and consumption patterns can substantially impact prices.
China’s economic data serves as a powerful precursor to market sentiment. A surge in manufacturing output or a sudden slump in consumer spending can swiftly influence oil prices. As factories hum with activity or consumer spending surges, the demand for oil climbs, prompting an upward price trajectory. Conversely, economic downturns can have the opposite effect, leading to a dip in demand and consequently, a decline in oil prices.
OPEC’s Role
Balancing the Equilibrium
In the realm of oil production and distribution, the Organization of the Petroleum Exporting Countries (OPEC) wields significant clout. Its decisions regarding oil production quotas and supply levels hold the power to tilt the delicate equilibrium between supply and demand, thus exerting substantial influence over oil price trends.
OPEC’s optimistic or pessimistic outlook on the market can sway prices in either direction. When OPEC decides to increase production quotas, it floods the market with more oil, which can lead to a drop in prices due to oversupply. Conversely, a reduction in production quotas can tighten supply and potentially drive prices higher. The interplay between OPEC’s actions and China’s economic data creates an intricate web of market dynamics, often leading to moments of uncertainty.
The Intriguing Interplay
Several variables contribute to the multifaceted nature of oil price fluctuations. Geopolitical tensions, rapid technological advancements, and increasing climate considerations all weave into this intricate tapestry. The geopolitics of oil-producing nations, the development of cleaner energy alternatives, and the global push for sustainability are just a few factors that impact the delicate balance between supply and demand.
In recent times, the global energy landscape has witnessed seismic shifts. The emergence of renewable technologies and the concerted push for cleaner energy sources are redefining the parameters of the oil market. As nations transition away from fossil fuels, the demand for oil undergoes transformation, triggering a cascade of market reactions. Investors keen on navigating this evolving terrain must pay heed to the changing winds of energy policies.
Economic indicators, akin to signposts, offer insights into the future direction of oil prices. When economic data suggests robust growth, it instills confidence in the market, leading to increased investments. Conversely, when economic indicators paint a gloomy picture, caution often takes the reins. This intricate interplay between data and market sentiment underscores the interconnectedness of economic health and oil prices.
Navigating Oil Price Fluctuations: China’s Impact and OPEC’s Optimism
The Glint of Gold
A Paralleled Perspective
The glittering world of gold provides an intriguing parallel to the realm of oil.
Despite economic fluctuations, the price of gold often remains resilient.
This phenomenon underscores the deep-seated connection between economic uncertainty and precious metals.
In times of market volatility, both gold and oil emerge as sought-after assets, offering stability in turbulent waters.
Gold and oil, while disparate in nature, share common ground as hedges against uncertainty.
Investors seeking refuge from market turbulence often turn to these commodities as safe havens.
This parallel underscores the intricate dance between market dynamics and investor behavior, where the allure of stability guides investment decisions.
Understanding the intricate dynamics of oil price fluctuations is paramount for investors seeking to fortify their portfolios. In a world characterized by volatility, the ability to navigate the unpredictable terrain of oil markets enhances portfolio diversification and risk management.
Effective management of oil market volatility demands a blend of foresight and adaptability. Investors must delve into the nuances of China’s economic trajectory and closely monitor OPEC’s actions. Furthermore, a keen eye on the transitions unfolding in the energy sector provides a valuable compass for gauging future oil price trends.
Conclusion
A Symphony of Influence
The symphony of influence orchestrated by China’s economic data and OPEC’s optimism continues to reverberate throughout the global oil market.
The delicate interplay between these two titans shapes oil prices, carving out a path for investment choices. As we stand at the crossroads of economic shifts and energy transitions, the ability to decipher the harmonious cadence of these influences holds the key to informed investment decisions.
FAQs
How does China’s economic data impact oil prices?
China’s economic data, reflecting shifts in manufacturing and consumption, directly affects oil demand, thus influencing global oil prices.
What role does OPEC play in oil price fluctuations?
OPEC’s decisions on oil production quotas create supply-demand imbalances, which ripple through the market, impacting oil price trends.
What factors contribute to oil price uncertainty?
Geopolitical tensions, technological advancements, climate considerations, and energy transitions collectively contribute to the volatility of oil prices.
Why is gold often considered a hedge against economic uncertainty?
Gold’s value remains relatively stable during economic fluctuations, making it a sought-after asset for investors seeking stability.
How can investors effectively navigate oil market volatility?
Investors can navigate volatility by analyzing China’s economic trajectory, monitoring OPEC’s actions, and staying attuned to energy sector transitions.
Navigating Oil Price Fluctuations: China’s Impact and OPEC’s Optimism
The International Energy Agency (IEA) recently downgraded its forecast for global demand growth from 1.4 million barrels per day to 1 million barrels per day due to slowing economic activity around the world.
This downward revision is further evidence that there may be trouble ahead for economies worldwide if current trends continue unabated.
Oil markets are particularly sensitive to changes in consumer behavior and sentiment
as they are highly dependent on people’s willingness and the ability to purchase gasoline or other petroleum products such as jet fuel or diesel fuel at any given period.
As concern about an upcoming recession grows, so too does uncertainty
about how consumers will respond by cutting back on their spending habits which could result in lower demand for petroleum-based products leading up to 2020.
In addition, recent geopolitical tensions between Iran and Saudi Arabia
have also contributed significantly towards falling oil prices over these past few days.
The US government’s decision not only imposes sanctions against Iran but also to increase tariffs on Chinese imports has created additional volatility within the market, with investors wary of taking risks when it comes to investing in crude futures contracts.
If you’re looking at ways you can protect yourself from this volatile market environment, then consider diversifying your investments across different asset classes including stocks bonds real estate etc – doing so will help reduce your risk exposure while still allowing you to capitalize off any upside opportunities should conditions improve unexpectedly going forward?
All things considered; these latest developments suggest that
we may see more downside pressure placed upon crude markets before long – something which all investors need to take note of before making decisions
based solely upon short-term price movements alone.
Oil Production Cut as Fear of Oversupply Mounts
Oil prices have been on a downward slide for the third consecutive day, as fears of a global recession continue to mount.
Prices for Brent crude, the international benchmark, fell 2.4 percent to $60.80 a barrel, while U.S. West Texas Intermediate crude fell 2.7 percent to $57.30 a barrel.
This decline follows a trend of declining demand and investor sentiment,
as trade disputes and geopolitical tensions have weighed heavily on the market.
Analysts attribute the decline to a lack of demand from major economies, which could lead to an oversupply of oil and an even further decrease in prices.
Oil companies and producers have responded to this market uncertainty by cutting production,
reducing spending, and laying off workers.
Major oil producers such as Saudi Arabia and Russia have both agreed
to reduce their production by 1.2 million barrels per day, while other nations such as Nigeria, Iraq, and Venezuela have also pledged to trim their output.
Some analysts are cautiously optimistic that these measures could help shore up prices, but others believe that further cuts will be needed to restore balance to the market.
In the meantime, consumers worldwide can expect to pay more at the pump, as oil prices continue to slide.
The Impact of Demand and Supply Chain
The global economy has been facing a period of uncertainty due to a variety of factors
such as trade disputes, geopolitical tensions, and a slowdown in China.
Trade disputes have led to tariffs being imposed on multiple countries, resulting in higher costs for businesses and potential job losses.
Geopolitical tensions are also influencing global investments with investors becoming warier in certain markets.
Lastly, China’s slowing economy is having an impact on other nations that rely heavily on Chinese exports.
All of this is leading to an overall uncertain economic future until these issues get resolved.
The Impact of the European Union’s Oil, The rise in oil prices is a result of industry data that showed U.S. crude stockpiles fell more sharply than expected last week.
With tensions running high between Iran and Saudi Arabia,
it remains to be seen how long this calm will last.
For now, though, it looks like oil prices are headed higher as traders bet on continued support from OPEC+.
Both benchmark contracts rose about 1% in the previous session as the United Arab Emirates, Kuwait, Iraq
and Algeria reinforced comments from Saudi Arabia’s energy minister that
the Organization of the Petroleum Exporting Countries (OPEC) and allies,
together called OPEC+, were not considering boosting oil output.
OPEC+ next meets to review output on Dec. 4.
The market had been jittery in recent days amid reports that some members of OPEC
were pushing for an increase in production due to fears that rising prices could hurt global economic growth.
However, it seems those concerns have been put to rest for now,
with Wednesday’s price action indicating that traders are confident
that OPEC will stick to its current production levels.
This highlights the supply tightness ahead of a looming
European Union bans and G7 price cap on Russian oil.
Brent crude futures gained 25 cents, or 0.3%, to $88.61 a barrel at 0101 GMT,
while US (WTI) crude futures rose 35 cents, or 0%.4%, to $81 .30 a barrel
The price cap on Russian oil is likely to see trade migrate to smaller businesses,
Vitol’s Chief Executive Officer Russell Hardy said at the FT Commodities Asia Summit.
The move would reduce market liquidity and increase costs for international oil companies (IOCs), he added.
Hardy’s comments come as Russia prepares to implement a new tax regime
which will see a ceiling placed on the export duties of crude oil and condensate from January 1, 2019.
The maximum duty will be set at $56 per tonne for crude and $48 per tonne for condensate.
The EU’s Plan to Stabilize
Quelling concerns that the cartel might increase output soon.
The European Union is confident that it will have its regulations in place
by December 5th, when a G7 plan to cap the price of Russian crude oil is set to go into effect.
This move would help stabilize global markets and protect consumers from sharp increases in fuel prices.
The EU has been working closely with Russia to ensure that this plan
can be implemented smoothly and without any disruptions.
Both sides are committed to ensuring that the transition is as seamless as possible.
This move will benefit both consumers and producers alike,
as it will help keep prices stable while still allowing for fair market competition.
It is yet another example of the EU working together with other countries to promote global economic stability.
Traders and investors are closely monitoring Russia’s exports considering recent tensions between the country and the West.
Many believe that if Russia were to trim its foreign sales in retaliation,
it could provide a boost to oil prices.
Inventories of U.S. crude fell by 4.8 million barrels last week,
according to data from the American Petroleum Institute,
which is seen as bullish for prices.
The EIA data showed that crude inventories fell by 1.6 million barrels
in the week to October 13, compared with analysts’ expectations for a 1.1-million-barrel drawdown.
On a bearish note, API data showed distillate stocks, which include heating oil and jet fuel,
rose by about 1.1 million barrels compared with analysts’ expectations for a drop of 600,000 barrels.
This is likely to weigh on oil prices in the near term as higher distillate stocks
could lead to lower demand for crude oil products.
With the approaching date of implementing the “OPEC +” plan next November,
which aims to reduce oil production by two million barrels per day,
this is the largest reduction since the Corona pandemic,
and this decision prompted the United States to pump more barrels,
as the number of rigs reached the highest level recorded in two years,
which came after it recorded a rise of about 21 excavators during the last six weeks
After the “OPEC +” decision was issued, this came to the disappointment of US President Joe Biden,
as he described it as his “disappointment,” and that this decision related to production cuts was a “short-sighted decision,”
noting that some low- and middle-income countries would be greatly affected.
In light of the conditions of high energy prices,
while “Biden” and his administration are trying to buy back American oil at prices ranging between 67 and 72 dollars a barrel,
and this is an important part of the plan that is being prepared in order to build strategic stocks,
and this also came in light of the attempt to release About 15 million barrels,
which represents a percentage of the strategic oil reserves, to be delivered in September
The return of the increase
in drilling and exploration
Businessmen in the field of shale oil stated that the decisions of “OPEC +” are considered a prelude to raising prices, which enables many companies interested in exploration operations to increase their activity, especially the exploration for American oil,
and thus we see the extent of the great activity of drilling operations in shale oil,
which has begun to return It has returned to its levels before the Covid 19 pandemic,
while the statistics in this regard indicate active drilling rigs with about 612 rigs,
which operate specifically in oil fields, and also included 157 rigs specialized in drilling for gas.
artıcle name Shale drilling activity recovers
Elon Musk started taking steps
towards making some deals and preserving his capital to complete them.
The International Washington Post has issued some documents stating that
Elon Musk has decided to reduce Twitter’s workforce
by approximately 75% in the coming months,
as this percentage represents approximately 5,500 employees out of 7,500 employees.
Today, Musk stated that he wants to maintain only 2,000 employees during the coming period.
After major legal battles over the Twitter deal,
the owner of Twitter ended up with some indications during the previous month
that reducing its workforce is a foregone conclusion to cut costs and
that he will go ahead with his way to buying Twitter and make it his private partner.
And the CEO of Tesla to reduce the number of employees in his initial offer to the banks to obtain financing, according to what Bloomberg reported earlier, as this deal, scheduled for the twenty-eighth of October, amounting to about $ 44 billion to buy the company,
is one of the most important and dangerous steps of billionaire Elon mask.
While the results Snapchat showed negatively impacting results on social media shares.
Snapchat recently showed continuous declines that in turn affected social media shares,
and for the third time in three quarters, the partner declined significantly,
which led the company responsible for Snapchat to announce a slowdown in growth,
and it announced this decline last Thursday by about 27% in extended trading During the American period
after the closing of the New York market.
These meager results directly
affected technology stocks, as the Nasdaq 100 index fell by 0.9%,
and it is also expected that losses on its partner Snapchat will continue to be
about $29 billion in the fierce competition of its partner Snap
and other platforms such as Facebook, a subsidiary of Meta, and Google,
a subsidiary of Alphabet Inc. Declining advertising funds this year.
The high rate of inflation puts pressure on consumer spending and
spending by companies operating in the field of technology,
this has come to a slowdown in spending on marketing, according to Snape’s management.
artıcle name Shale drilling activity recovers
A very fierce week waiting for the new increase in interest and developments in China.
With the escalation of the energy crisis in the euro area and the outbreak of unprecedented inflation,
and coinciding with the recession that the country has reached,
it is certain that the European Central Bank will certainly raise interest rates and follow monetary tightening policies.
The European Union
has not gone through these crises for a long time,
and if the economic situation is similar to the 2008 crisis caused by the collapse of the American Lehman Brothers bank,
which previously decided to raise borrowing costs from the European Union,
history may repeat itself and if events differ, but Hungary is one The result is considered one,
despite the aggravation of the current crises and the ferocity of inflation that the European Union has never seen before.
The Russian war in Ukraine has left many crises that will take a lot of time to treat their consequences.
It is not that easy for decision-makers to raise interest rates this time,
it will cause a major recession that will negatively affect economic growth,
which is fighting against inflation, despite this insistence on raising interest rates by another 75 basis points,
which is the dominant matter for the majority of decision-makers in the European Union,
according to Bloomberg Economics, the European Central will focus on the very high inflation rate
and will continue to raise interest rates with the weakness of the economy in October,
and the deposit rate will end the tightening cycle at 2.25% next February,
without regard to the size of the consequences of that violent decision,
according to the visions of economists and analysts.
Looking at some countries following the same path, GDP reports may show a return to growth in the US,
a contraction in Germany, and a slowdown in France. The selection of a new prime minister in the UK as well as the unchanged interest rate decisions in Japan , Russia, and Brazil will be among the other highlights
that will move the market violently this week while coinciding with
them is the US government’s estimate of growth for the third quarter,
as well as income and inflation figures for the month September and the Personal Consumption Index as well.
It is expected that domestic production will be buoyant from July to September by about 2.3%,
according to reports and a poll of economists.
Next Friday
will witness violent movements in the market,
as it is scheduled to disclose income and spending reports for the month of September,
and this will determine the extent of the economy’s momentum during the fourth quarter of this year,
as will also appear indicators of inflation, which rose in a crazy way from about Forty years,
which is followed by Federal Reserve officials earn.
In the Asian region, it seemed interesting. Despite the decline in the Japanese yen,
the Governor of the Central Bank of Japan, Haruhiko Kuroda, shows some optimism,
as he declared commitment to very low rates to reach a satisfactory level regarding
inflation despite the pressure facing the currency and raising the return ceiling from the Bank of Japan,
which It will meet to decide on future policies after closely observing the path of the yen during the last period.
China has continued its path towards
solving some of the crises it faced during the recent period,
such as the housing crisis and the decline in exports.
It has appointed a new team that will monitor investors tightly,
and this indicates a new path in economic policies,
especially after the recent decline in GDP during the quarter.
South Korea will also release GDP figures next Thursday which are expected
to show slowing growth and in Southeast Asia,
Singapore releases its latest inflation figures,
which are likely to show continued price increases at their highest level in nearly fourteen years. year, while the Central Bank of the Philippines will be monitored as it seeks to defend the currency against more consecutive losses that it witnessed during the previous period of this year, especially after the recent interest decisions.
In view of Russia, which is beginning to show exhaustion from its war with Ukraine,
it was decided to hold a meeting of policymakers regarding the aggravation of the inflation crisis
and the loss of confidence that the country is suffering from during this period.
Next Monday will also witness Chile’s report on employment,
manufacturing, and copper production data, as well as the meeting of the Central Bank’s advisor,
who met to maintain the rate at 11.25%.
And the role of economic tightening taken by Mexico has led to the reduction
of consumer prices despite the weak growth.
New Hope for OPEC: Secretary-General of OPEC Haitham Al-Ghais,
said after meeting with Algerian President Abdelmadjid Tebboune and Minister of Energy and Mines Mohamed Arkab during a press conference in which he linked investment to the oil sector and the stability of markets,
stating that the size of the oil industry needs 12 trillion dollars until 2045, so how can countries pump all of this?
Money without stability in the global market. If we look at Al-Ghais’ talk with a perceptive eye,
we conclude that the instability of the oil price means that no investment is being pumped,
which prompted the organization to reduce oil production until stability occurs in the market.
The OPEC
the meeting was held in Austria on the fifth of this October,
and the President had met to reduce oil production by about one million barrels per day,
in line with the reports, it conducted last Wednesday,
which proved the correctness of their theory in the demand market,
which is expected, according to their reports, to decrease by 500,000 barrels per day during this current year and by next year it may drop to nearly 400,000 barrels or a total of 900,000 barrels,
and this does not contradict their view at all,
despite the dissatisfaction of the American side with this decision,
describing it as a short-sighted decision in the words of President Biden,
who expressed His dissatisfaction with those decisions,
while the countries included Iraq, Oman, Bahrain, Kuwait, and Algeria supported the decision
and said that it was taken unanimously,
and was based on purely economic indicators without regard to international opinion and its interests,
as the Saudi Defense Minister rejected those accusations against the organization and Riyadh in particular.
The matter expressed
the astonishment of the Saudi Defense Minister, Prince Khalid bin Salman,
as he indicated that accusing Saudi Arabia of allying with Russia and standing by it against Ukraine with those decisions that would reduce oil production are false and baseless accusations and did not come from Ukraine itself,
which indicates an indulgence these accusations are of personal interests.
Both Bahrain and the Sultanate of Oman said that the OPEC alliance took
its decision unanimously to reduce production by two million barrels per day,
while the CEO of the Kuwait Petroleum Corporation, Nawaf Al-Sabah,
affirmed Kuwait’s keenness to maintain balance in the oil markets for the benefit of consumers together as well.
In an important statement,
the Iraqi Somo Oil Distribution Company has issued a decision
based on economic indicators and there is complete consensus among
the OPEC countries in opinion and their meeting on
those decisions due to the instability of the market at present,
and it is a proactive approach that directly supports the stability of the oil market.
New statements by the Secretary-General of OPEC give hope again
Haitham Al-Ghais, Secretary-General of OPEC,
said after meeting with Algerian President Abdelmadjid Tebboune
and Minister of Energy and Mines Mohamed Arkab during a press conference in
which he linked investment to the oil sector and the stability of markets,
stating that the size of the oil industry needs 12 trillion dollars by 2045,
so how can countries pump all of this? Money without stability in the global market.
If we look at Al-Ghais’ talk with a perceptive eye,
we conclude that the instability of the oil price means that no investment is being pumped,
which prompted the organization to reduce oil production until stability occurs in the market. Conclusion.
The OPEC meeting was held in Austria on the fifth of this October,
and the President had met to reduce oil production by about one million barrels per day,
in line with the reports it conducted last Wednesday,
which proved the correctness of their theory in the demand market,
which is expected, according to their reports, to decrease by 500,000 barrels.
per day during this current year and by next year it may drop to nearly 400,000 barrels or a total of 900,000 barrels,
and this does not contradict their view at all, despite the dissatisfaction of the American side with this decision,
describing it as a short-sighted decision on the words of President Biden,
who expressed His dissatisfaction with those decisions, while the countries that included Iraq, Oman, Bahrain, Kuwait, and Algeria supported the decision, and said that it was taken unanimously,
and was based on purely economic indicators without regard to international opinion and its interests,
as the Saudi Defense Minister rejected those accusations against the organization and Riyadh in particular. ,
The matter expressed the astonishment of the Saudi Defense Minister, Prince Khalid bin Salman,
as he indicated that accusing Saudi Arabia of allying with Russia
and standing by it against Ukraine with those decisions that would reduce oil production are false
and baseless accusations and did not come from Ukraine itself,
which indicates an indulgence These accusations are of personal interests.
Both Bahrain and the Sultanate of Oman said that
the OPEC alliance took its decision unanimously to reduce production by two million barrels per day,
while the CEO of the Kuwait Petroleum Corporation, Nawaf Al-Sabah,
affirmed Kuwait’s keenness to maintain balance in the oil markets for the benefit of consumers together as well.
In an important statement,
the Iraqi Somo Oil Distribution Company has issued a decision based on economic indicators and
that there is complete consensus among the OPEC countries in opinion and
their meeting on those decisions due to the instability of the market at present,
and it is a proactive approach that directly supports the stability of the oil market.
Banning electronic chips at this time put China in crisis.
US President Joe Biden continues Trump’s march,
as he has implemented stricter rules that represent a development in tightening the screws on Beijing strongly.
It is expected that this tightening will be due to China’s access to American semiconductor technology,
which constitutes strong commercial and geopolitical advantages for China,
but the choice of time was not in their favor and the This affected the shares of chip industry leaders around the world.
While America insists on not allowing China to enter that industry through the latest restrictions it imposed from preventing access to equipment and software for chip manufacturing that China used to manufacture chips of 14 nanometers or less,
China is determined to catch up with foreign semiconductor leaders and move forward,
where the majority of The manufacturing capacity in the country is 28 nanometers and more,
unlike TSM, which manufactures chips up to 5 nanometers for its customers.
The smaller the nanometer, the more advanced the chip becomes.
This is what China aspires to, the global industry goal at the moment,
at a time when America is standing by.
While Washington has been sending signals about its policies for several months.
Biden’s current tightening regime would like to exacerbate already existing problems
reaping its profits by taking control of a system such as semiconductors.
The chip market witnessed a major crash, with Philadelphia Semiconductor,
which is the largest measure of the market, losing about 9% in just two days.
The reaction of the American system sparked the reaction of the American system
To tighten the screws on those in charge of this industry,
especially after stopping dealing with Chinese companies.
The current stagnation due to raising interest rates may lead to the demand for foil used in iPhone devices,
despite the amount of suffering that the market has faced over the past two years.
Earnings next Thursday. However, analysts will focus differently on any signal that helps them show the problems away from any Washington actions,
including spending plan and revenue growth targets as well as any inventory level
that represents the overall shape of the chip pumping machine in the market
Lamm Research shares fell 12% over two days due to its strong association
with China as it depends on approximately 31 percent of its sales from China
and will be greatly affected in the future by these strict rules.
TSM American Depository Receipts have declined ) by about 9% during the past two days as well,
while its shares listed in Taiwan fell last Tuesday by about 7.1% (after the National Day holiday last Monday),
which constitutes the largest drop during the day in 27 years.
This massive decline defies logic, if we simply link it to the latest US measure,
because the company gets only 10% of its revenue from China,
the chip market may be severely affected by these measures as it has been suffering for so long
before the intervention of US policy that could decimate what is left of it on her hand.
artıcle name New statements by the Secretary-General of OPEC give hope again
The market storm intensified with data and turmoil!
A bright start for the dollar this week as well,
as jobs data contributed to inflation losing its grip on the table while confirming
the Fed’s view of continuing the hawkish path while giving them an excellent opportunity to raise interest rates
by another 75 basis points by next November during the monetary policy meeting.
While the euro fell during the past week, the sterling regained its strength again after receiving the good news
that contributed to its significant progress, especially after the turmoil that the market was going through during
the previous period that almost pushed it to the bottom of a historical base,
while the yen recorded a significant decline against the dollar and reached the bottom It has not been achieved
since the 1990s and the main reason for this was the tightening of the Fed policy with the rate hike
which was met by the Bank of Japan adopting support and intervention policies
that did not work and caused the yen to decline during the last week.
It seems comfortable for the US dollar,
but it is the recent OPEC decisions that cause significant inconvenience,
as the reduction in production quotas and the ban on gasoline exports announced by Biden may create a crisis
that coincides with and supports inflation and leads to an increase in fuel prices in general,
which has the consequence It has to rise in the prices of many commodities,
which makes raising interest rates again and the continuation of the strict policies is inescapable.
Traders have also priced the Federal Reserve raising interest rates next year,
and it should be noted that geopolitical events may keep inflation rates high.
There is no doubt that Federal will continue his career without retreat.
These policies contributed to reducing the appetite of the American consumer,
as September recorded the largest price increases in the consumer market in line with the decisions of the Federal Reserve,
which aspires to slow the economy temporarily to fight inflation,
and overall sales stabilized while the basic figure advanced by only one percent.
Since the retail sales data was not adjusted according to inflation rates,
the report indicates a decline in real spending during the month,
despite recording sharp growth, but retail sales rose by 8.2% at the annual level,
which may correspond to the rise in the consumer index during the coming period.
The core index, which excludes foodstuffs and energy, increased by about 7.2% over the year and 0.3% in September. The producer price index also increased by .04% compared to August,
where it rose by 8.5 on an annual basis, despite the rise in energy, services, and food costs.
The index also flourished. Producers in the services sector are strongly promising to show signs of growth.
As for the United Kingdom.
The new prime minister, Liz Truss, demanded the dismissal of the chancellor last week,
indifferent to the economic situation as the specter of peak inflation has become
one of the most vexing concerns of Bank of England Governor Andrew Bailey,
and Quarting made a statement in late September about tax cuts
that quickly turned into an economic and political catastrophe.
The mini-budget included a plan to cancel the proposed tax increase from 19% to 25%
– with a value of up to eighteen billion pounds.
But for everyone to taste honey, you must take your luck from a bee sting.
These decisions have hurt some trends. Government bond prices have fallen,
which forced the Bank of England to intervene for two weeks after
it was informed that several investment funds loaded with
commitments as part of a program Pensions were hours away from collapsing,
as Terrace managed to calm the markets with a press conference,
explaining that the mini-budget it set went quickly, contrary to expectations.
At the press conference, the UK economy disappointed expectations of contraction in August,
after the cost-of-living crisis led to a sharp decline in industrial production and consumer prices,
indicating that the economy may already be in the doldrums and
maintenance of the North Sea gas fields had to have a major impact.
On the decline, as the domestic production decreased by about 0.3% during August,
it seems that the order to raise the interest rate by 75 basis points again has become long-term.
All events do not bode well for the future, Recover from inflation in the near term.
artıcle name New statements by the Secretary-General of OPEC give hope again
OPEC+ and Russian-led allies for the first time in 2 years are meeting in person to discuss a significant oil production cut that not all participants are in favor of.
The 45th Meeting of the Joint Ministerial Monitoring Committee (JMMC) and the 45th OPEC and non-OPEC
The Ministerial Meeting will take place in person at the OPEC Secretariat in Vienna, Austria, on Wednesday, 5 October 2022. The OPEC Secretariat looks forward to welcoming all ministerial delegations again to Vienna.
Not all are in favor of the OPEC+ and Russian allies ‘historic’ cut Now not all members are on board with the proposed production cuts. Iran, for instance,
has been reluctant to reduce its output levels because it needs revenue to fund its economy.
OPEC+ meeting on Wednesday to discuss the proposed output cut. It is not yet clear if all members of
the Russian allies will agree to the cut. Russia, which is not a member of OPEC, has not yet said if it will
support the output cut. The coronavirus outbreak has already caused a sharp drop in demand for oil as
travel restrictions and other measures have been put in place to contain the virus. The International
Energy Agency has forecast that global oil demand will fall by 435,000 barrels per day in the first quarter
of 2020 because of the outbreak.
Additionally, some analysts believe that Saudi Arabia and other major producers may be overstating their reserves to justify cuts. As such, it remains to be seen whether or not this meeting will result in an agreement
among all members, yet OPEC is expected to announce a production cut. This would be a historic move, as it
would be the first time in two years that OPEC has taken action to reduce output.
The reason
The reason is simple: global oil demand has been weak due to the pandemic and OPEC wants to prop up prices.
A production cut will do just that. Some argue that Saudi Arabia, the largest producer within OPEC, should shoulder
most of the burden when it comes to cuts. After all, they have been able to weather the storm better than most
thanks to their large reserves.
However, investors believe that all members should make a sacrifice for this deal to work. Otherwise, we could see
prices continue to decline and further harm producers who are already struggling.
What if?
If OPEC does agree on a production cut at this meeting, it could help alleviate some of the pressure on oil prices.
However, it is worth noting that such cuts would likely only be temporary fixes; without fundamental changes to global
demand and supply dynamics (such as increasing the use of renewable energy), oil prices are highly likely to continue
their downward trend over the long term.
In conclusion, it’s the first time in two years since 2020, the OPEC ministers are not heading to Austria and not taking any
action. Therefore, a historic cut will be made, and investors believe that an agreement will be reached at this week’s meeting and that it will be good for both consumers and producers alike. All members must come together and make some sacrifices
so that we can get through these tough times together – stronger
