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Ukrainian Prime Minister: During my meeting with Polish Prime Minister Tusk, I expressed to the Polish people their gratitude for their continued support of Ukraine. In the near future, we look forward to signing an agreement on joint control of shared border crossings and resolving technical issues related to registering Ukrainian transport vehicles in the SENT/RMPD system.The Russian Foreign Ministry stated that Russia will blacklist EU representatives who participated in aid decisions to Ukraine and who hold hostile views towards Moscow.On April 27th, PIMCO analysts Peder Baker-Fries and Constantine Witter stated in a report that due to ongoing tensions in the Middle East and the high degree of uncertainty surrounding the impact of the conflict, the Bank of England is expected to keep interest rates unchanged at 3.75% in 2026. They noted that a weak UK labor market should limit a second round of inflationary pressures from high energy prices. "Policy is already constrained, and the Bank of England may be able to hold rates steady." However, they also stated that if energy prices rise further, the Bank of England may raise interest rates to prevent a sharp increase in inflation. Data from the London Stock Exchange shows that the market expects an 84% probability that the Bank of England will keep interest rates unchanged in its decision on Thursday.On April 27th, UniCredit economists stated in a report that the European Central Bank (ECB) is likely to keep interest rates unchanged this week, but will raise them by 25 basis points in June and September respectively. They noted that under the baseline scenario, the energy market should gradually return to normal during the summer, with inflation averaging around 3.5% in the second half of this year, before falling back to around 2% in the second half of 2027. "In this environment, assuming no economic problems, the likelihood of future rate hikes is greater than not raising rates." The ECB will release its latest macroeconomic forecasts in June, allowing for a more precise assessment of the risks to price stability. "That will be the appropriate time for the ECB to take action," they stated.On April 27th, UBS analyst Dean Turner stated in a report that market pricing reflects a higher probability of a Bank of England rate hike than it should actually be. He pointed out that this weeks Bank of England meeting will focus on evidence of a second-round effect, such as changes in wage and pricing behavior, and how monetary policy may need to respond. However, the Bank of Englands policymakers panel and agent summary suggests that energy price shocks are more likely to squeeze corporate profits and demand than trigger a wage-price spiral. "Despite a rise in one-year inflation expectations, long-term expectations remain stable, and expected wage growth has not climbed," Turner said. The risks to economic growth also indicate that central banks will maintain a cautious approach.

Oil Quiet As Price Cap Suggestion Assists in Relieving Supply Concerns

Skylar Williams

Nov 25, 2022 14:48

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Benchmark Brent oil declined on Thursday, while West Texas Intermediate (WTI) crude remained unchanged, hovering at two-month lows due to uncertainty about the degree to which a proposed G7 restriction on the price of Russian oil would limit supply.


A larger-than-anticipated rise in gasoline inventories in the United States and an expansion of COVID-19 limitations in China also knocked on oil prices.


At 15.15 p.m. ET (2015 GMT), Brent oil prices decreased 29 cents, or 0.3%, to $85.12 per barrel, while U.S. WTI crude futures decreased 2 cents, to $77.96 per barrel.


Due to the Thanksgiving break in the United States, trade volumes were quite low.


The announcement on Wednesday that the expected price ceiling for Russian oil may surpass the current market level triggered a decrease of about 3 percent for both benchmarks.


European Union nations remained divided over what level to cap Russian oil prices to limit Moscow's ability to pay for its battle in Ukraine without causing a global oil supply shock; if positions converge on Friday, more conversations are possible.


A European official claimed that the G7 is discussing a cap of $65-$70 per barrel for Russian oil transported by sea, but European Union member states have not yet reached an agreement on a price.


A higher price ceiling might encourage Russia to continue selling its oil, decreasing the possibility of a global oil supply shortage.


According to two sources, several Indian refiners are discounting Russian Urals crude by between $25 and $35 per barrel compared to the worldwide benchmark Brent oil. Urals is Russia's principal crude export.


Despite the obstacles, Bart Melek, global head of commodities market strategy at TD Securities, is rather optimistic about oil. "The Russian price ceiling is another aspect that contributed to the current price fall," he stated.


The Energy Information Administration (EIA) said on Wednesday that gasoline and distillate inventories in the United States climbed substantially during the previous week. [EIA/S]


In contrast, oil stockpiles decreased by 3.7 million barrels to 431.7 million barrels in the week ending November 18, despite a Reuters survey predicting a reduction of 1.1 million barrels.


China reported the highest daily number of COVID-19 cases since the outbreak began over three years ago on Wednesday. Local officials intensified measures to remove the breakouts, raising investor anxiety over the economy and demand for fuel.

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