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On February 3rd, Apurva Sheth, Head of Market Views and Research at Samco Securities in India, stated that the market should not have miraculous expectations for a US-India trade agreement. In a report, she pointed out that the US reduction of tariffs on Indian goods to 18% is likely to significantly boost previously subdued market sentiment, as this will allow Indian products to become more competitive in the US domestic market. However, she added that exports to the US account for only a small portion of Indias $4 trillion GDP, and the related boost is expected to be short-lived. Although the Indian benchmark Sensex index rose sharply at the open following this news, Sheth believes that the stock market needs "new long positions to be established" to maintain this upward momentum.Moodys: Indias full shift to non-Russian oil could also lead to supply shortages in other regions, pushing up oil prices and ultimately causing higher inflation.Moodys: U.S. tariff cuts on most Indian goods will revive Indian exports to the U.S.February 3 - It was learned on February 2 local time that the U.S. House Rules Committee passed a government spending bill that evening with 8 votes in favor and 4 against, paving the way for ending the partial government shutdown and proceeding to a full House vote. The bill, which had previously passed the Senate, includes five annual appropriations bills and a two-week temporary funding arrangement for the Department of Homeland Security (DHS) to allow Congress to continue negotiating on immigration enforcement-related disagreements.February 3rd, Futures Market News: Zhengzhou rapeseed meal futures opened flat and then fluctuated downwards. Canadian canola futures closed lower, with the benchmark contract down 0.46%, mainly dragged down by declines in international crude oil futures and Chicago soybean oil. Rapeseed meal spot prices followed suit, with Guangxi oil mills beginning to crush Australian canola. The market anticipates a gradual easing of the tight rapeseed meal supply situation, coupled with the end of pre-Chinese New Year stockpiling, suggesting downward pressure on rapeseed meal prices.

After Geopolitical Worries, Oil Sales Resume

Skylar Williams

Nov 17, 2022 15:40

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Even a big drop in U.S. crude stocks does not appear to be sufficient to guarantee an increase in oil prices at this time.


Crude oil futures resumed their drop on Wednesday, as supply concerns that had supported the market in the previous session faded away.


Also striking was the dealers' disregard for weekly Energy Information Administration (EIA) inventory data.


For the week ending November 11, the EIA reported a crude inventory decrease of 5.4 million barrels, compared to the expected decrease of 440,000 barrels and the previous week's decrease of 3.925 million barrels. During the previous week, U.S. crude imports decreased by an average of 900,000 barrels per day, or more than 6.0 million barrels in total.


Nonetheless, the market remained fixated on the resumption of Russian oil exports to Hungary via the Druzhba pipeline and the rise in Covid-19 infections in China.


According to operators of oil pipelines in Hungary and Slovakia, a portion of the Druzhba pipeline was temporarily shut down for technical reasons on Tuesday, halting the flow of oil to portions of Eastern and Central Europe. Wednesday, Peter Szijjarto, the Hungarian foreign minister, announced that Russian oil supplies through the Druzhba pipeline have resumed.


After a tanker sustained minor damage off the coast of Oman on Tuesday, both New York-traded West Texas Intermediate crude and London's Brent crude rose early on Wednesday, highlighting the geopolitical dangers in the world's busiest oil shipping routes.


"Various geopolitical influences, such as an oil tanker being struck by a bomb-carrying drone off the coast of Oman and Russia tensions, are being largely ignored in favor of more bearish elements, such as weak Chinese economic data and demand," said Matt Smith, oil analyst at Kpler, in comments carried by Reuters.


The rising incidence of COVID-19 in China reduced morale following this week's easing of virus restrictions. Chinese officials shut down Peking University after discovering a single COVID case, demonstrating their unwavering commitment to the country's zero-COVID policy.


Beijing also reported over 350 new Covid cases in the past 24 hours, according to the Associated Press, which represents a negligible portion of the city's 21 million population but is sufficient to trigger localized lockdowns and quarantines under China's zero-Covid plan. This week, China recorded nearly 20,000 new cases, compared to 8,000 the week before.


Wednesday, oil's selling pressure was attributed to options expiry, which may frequently amplify market direction changes.


Despite this, WTI for December delivery finished at $85.59 a barrel, down $1.33, or 1.5%. The benchmark for U.S. crude declined by 4% week-to-date, the same as the previous week.


Brent for January delivery decreased $1, or 1.07 percent, to $92.86. After a decline of 2.6% the previous week, the global crude benchmark dropped over 3.5% for the week.


Aside from the crude decrease, the EIA's weekly statistics on fuel products were negative, with a larger-than-anticipated increase in gasoline and an unexpected increase in distillate stocks.


The Biden administration's depletion of petroleum from the U.S. Strategic Petroleum Reserve was similarly below average, at around 4 million barrels compared to summer highs of eight million barrels.

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