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World news breaking now: An unexpected threat from U.S.-China conflict has been named

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World news breaking now – Any escalation of the U.S.-China conflict over Taiwan could threaten global supply chains, Bloomberg expects. The agency called any action on the island “a blow to global shipping.

The Strait of Taiwan is the main route of ships going from China, Japan, South Korea and Taiwan to the West – through it the goods produced in Asian factories are delivered to markets in Europe, the United States and other countries. According to the agency, in 2022, 88 percent of the world’s largest merchant ships and 48 percent of the 5,400 container ships passed through the strait.

An alternative trade route could be a route through the Philippine Sea, bypassing the coast of Taiwan to the east. However, other options entail greater risks because of natural phenomena typical of the South China Sea – the region is often hit by typhoons, an average of 20 per year.

Supply chain disruptions around the world could seriously affect global trade relations. In 2022, the global logistics system was hit hard by the coronavirus pandemic and lockdown in China. Then, sanctions, which were a response to Russia’s actions in Ukraine, influenced the supply restriction.

Taiwan has long been a point of contention between the U.S. and China. On August 2, tensions between the states escalated over the announcement of a visit to the island by U.S. House Speaker Nancy Pelosi. In response to Washington’s action, Beijing began military exercises with live firing in the Taiwan Strait. Taiwan, in turn, raised its military readiness because of the potential threat.

Commodities

US seeks to buy up to 3 million bbls of oil for Strategic Petroleum Reserve

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US seeks to buy up to 3 million bbls of oil for Strategic Petroleum Reserve
© Reuters. An oil storage tank and crude oil pipeline equipment is seen during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson

By Timothy Gardner

WASHINGTON (Reuters) – The U.S. Department of Energy on Friday said it wants to buy up to 3 million barrels of for the Strategic Petroleum Reserve (SPR) for delivery in March 2024, as it takes advantage of lower prices to start to replenish the stockpile.

The administration of President Joe Biden last year conducted the largest sale to date from the SPR of 180 million barrels to try to limit an oil price rally after Russia’s war on Ukraine began in February 2022.

The Energy Department in October said it would buy back oil for the reserve at $79 per barrel or lower, after it had received an average of about $95 a barrel from last year’s emergency sales. It plans to release monthly offers to buy crude for the emergency stash through May next year.

The new solicitation is for sour crude and the delivery will be received by the Big Hill SPR site in Texas.

The department has bought back nearly 9 million barrels for the reserve at about $75 a barrel. It has also secured the return of nearly 4 million barrels by February, several months ahead of schedule, from a previous exchange with oil companies.

Department officials have said that the return of oil is being tempered by planned life extension maintenance at the SPR, where oil is held in hollowed-out salt caverns on the Texas and Louisiana coasts. The reserve currently holds 351.9 million barrels of oil.

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Commodities

Oil gains over 2% but records seventh weekly decline

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Oil gains over 2% but records seventh weekly decline
© Reuters. An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Picture taken on November 12, 2021. Mandatory credit Kyodo/via REUTERS ATTENTION EDITORS – THIS IMAGE WAS PROVIDE

By Shariq Khan

BENGALURU (Reuters) -Oil prices rose more than 2% on Friday after U.S. data supported expectations of demand growth, but both benchmarks fell for a seventh straight week, their longest streak of weekly declines in half a decade, on lingering oversupply concerns.

futures settled at $75.84 a barrel, up$1.79, or 2.4%, while U.S. West Texas Intermediate crude futures settled at $71.23, up $1.89, or 2.7%.

For the week, both benchmarks lost 3.8%, after hitting their lowest since late June on Thursday, a sign that many traders believe the market is oversupplied.

Also fuelling the market’s downturn, Chinese customs data showed its imports in November fell 9% from a year earlier as high inventory levels, weak economic indicators and slowing orders from independent refiners weakened demand.

However, Friday’s gains, the first in six sessions, could be a sign that the market has found a floor for now after falling for six straight sessions, said Phil Flynn, analyst at Price Futures Group.

“Look to step in with caution but the lows should be in,” he said.

U.S. Labor Department data released showed stronger-than-expected job growth, signs of underlying labor market strength that should support fuel demand in the biggest oil market.

That followed government data on Wednesday showing U.S. gasoline demand last week lagged the 10-year seasonal average by 2.5% and gasoline stocks rose by 5.4 million barrels, more than quintuple forecasts, leading to gasoline prices to plummet. [EIA/S]

Like crude, U.S. RBOB gasoline futures on Friday rebounded about 3% from two-year lows on Thursday.

“Wednesday’s Energy Information Administration (EIA) report which spurred concern of soft demand on a significant increase in gasoline inventories, may not be as concerning in the wake of the strong jobs report,” said Rob Haworth, senior investment strategy director at U.S. Bank Asset Management.

Offering more support to the demand enthusiasm, data showed U.S. consumer sentiment perked up much more than expected in December.

Meanwhile, Saudi Arabia and Russia, the world’s two biggest oil exporters, on Thursday called for all OPEC+ members to join an agreement on output cuts just days after a fractious meeting of the producers’ club.

The Organization of the Petroleum Exporting Countries and its allies last week agreed to a combined 2.2 million barrels per day (bpd) in output cuts for the first quarter of next year. The market has been concerned, however, that some members may not adhere to their commitments.

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Commodities

Oil prices wrap up week with 7th weekly loss as supply surplus concerns continue

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Oil prices wrap up week with 7th weekly loss as supply surplus concerns continue
© Reuters.

Investing.com – Oil prices rallied Friday, as a stronger jobs report lifted optimism about a U.S. soft landing, but that wasn’t enough to stave off a seventh-straight weekly plunge as fears about a global supply surplus continues to keep the bears in control.

At 14:30 ET, rose 2.7% to settle at $71.23 a barrel. The expiring in February had added 2.4% to $75.81 per barrel. Both contracts, however, ended the week about 4% lower.

OIl prices rise on growing US soft landing bets

Oil prices were pushed higher Friday, a stronger than expected jobs report added to hopes the U.S. will avoid a recession, underpinned the crude demand outlook.

“A soft landing in the US and ongoing structurally accommodative government policy in China could see demand beat expectations,” ANZ Research said in a note.

But.. Oversupply concerns remain front and center

Concerns that supply will outstrip demand, leading to supply surplus continued cast a shadow on oil prices at time when markets doubt pledges by OPEC+ to collectively cut production by 2.2 million barrels per day early next year.

“The lack of details in the announcement opens the possibility of producers sidestepping their commitments,” ANZ Research said in a recent note.

Saudi Arabia and Russia attempted to restore confidence, calling on fellow members of the Organization of the Petroleum Exporting Countries and its allies — a group known as OPEC+ — to adhere to an agreement on output cuts made last week.

Should OPEC+ members honor their pledges to cut that would ease worries about supply surplus concerns despite ongoing non-OPEC output growth.

“Nevertheless, the cuts should see our previously forecast surplus in Q1 2024 turn into a small deficit. .

Rig counts fall

Oilfield services firm Baker Hughes Co (NYSE:BKR) reported its weekly U.S. rig count fell by two to 503.

The fall in rigs, which started at the start of summer, pointing to slowing production comes just as data showed U.S. production rose to record highs.

In the U.S., crude production was near record highs of over 13 million barrels per day in the week to Dec. 1, threatening to exacerbate concerns at the time over slowing American oil consumption.

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