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Japanese Chief Cabinet Secretary Minoru Kihara: No unusual activity has been observed at Mount Fuji.June 26th - According to sources, the ruling coalition led by German Chancellor Merz is negotiating up to €20 billion in personal income tax cuts, attempting to leverage the current momentum to advance a broader reform agenda. However, the parties remain divided on how to finance the tax cuts. Merzs Christian Democratic Union (CDU) leadership and the Social Democratic Party (SPD) leaders will meet on Sunday to bridge their differences on tax cuts for those earning less than €100,000 annually. The coalition partners are preparing to meet on July 1st to finalize plans for pension, healthcare, and tax system reforms to revitalize German economic growth.New York gold futures touched $4,100 per ounce, up 1.29% on the day.U.S. stocks narrowed their losses, with the S&P 500 briefly turning positive, the Dow Jones Industrial Average down slightly by 0.01%, and the Nasdaq Composite Index narrowing its losses to 0.26%.On June 26th, the final reading of the University of Michigan Consumer Sentiment Index for June came in at 49.5 (preliminary reading 48.9), up about 10% from May, due to a slight decline in gasoline prices. Consumer confidence improved across income, wealth levels, and political affiliations. Expectations for business conditions over the next five years rose sharply by 16%, suggesting that consumer concerns about the long-term consequences of the conflict with Iran appear to be easing. However, the index remains in unfavorable territory, 13% lower than the figure for February 2026 (before the outbreak of the conflict) and nearly 20% lower than the same period last year. The cost of living remains the biggest concern for consumers: for the third consecutive month, more than half of consumers cited high prices as dragging down their personal finances. Inflation expectations for the next year fell slightly to 4.6% this month from 4.8% in May, but remain high. The current reading is significantly higher than the 3.4% in February before the outbreak of the conflict, and also higher than all data for the whole of 2024. Long-term inflation expectations fell to 3.3% in June from 3.9% last month, but remain slightly above the 2.8%-3.2% range for 2024.

China COVID-Induced Oil Price Decline May Drive the Price of a Barrel Below $85

Aria Thomas

Sep 02, 2022 11:06

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The picture for oil bulls is unfavorable, and things could worsen before they improve.


New COVID-related lockdowns in China have prolonged the oil selloff for a third day in a row, boosting the likelihood that U.S. crude will go below $85 per barrel for the first time since late January.


Brent crude, the global benchmark for oil traded in London, closed at $92.36 a barrel, down $3.28, or 3.4%, from its session low of $93. Brent prices fell 2.8% on Wednesday and 5% on Tuesday, respectively.


West Texas Intermediate, the standard for U.S. crude traded in New York, finished at $86.61, down $2.94, or 3.3%. Tuesday's decline was 5.5%, while Wednesday's decline was 2.3%.


Thursday's WTI session low was $86, just $1 away from breaching the $85 support.


"From a technical perspective, a break below $85 might drive WTI to test the monthly $82 Middle Bollinger Band," said Sunil Kumar Dixit, chief technical strategist at SKCharts.com. In the case of a fall, the price might reach $77.98 before resuming its climb to the $97-$99 resistance zone.


Again, this is a technical point of view. Obviously, from a broader view on oil, the fundamentals must also be considered," noted Dixit.


Even prior to the China COVID scandal, the fundamentals were at best unclear.


Wednesday, when traders anticipated the oil producing coalition to announce production cuts, OPEC+ gave a more positive demand outlook.


OPEC+ reduced its oil surplus prediction for 2022 to 400,000 barrels per day and predicted a shortage of 300,000 barrels per day for 2023.


The monthly meeting of the 23-nation OPEC+, comprised of the original 13 members of the Saudi-led Organization of Petroleum Exporting Countries and its 10 Russia-led allies, will be held on September 5. If it does not announce any reductions at that time, oil prices may continue to decrease due to fears of weak seasonal demand beginning on September 22.


The White House said on Thursday that Vice President Joe Biden met with Israeli Prime Minister Yair Lapid on Wednesday regarding the revival of a 2015 nuclear agreement that is fervently desired by Iran but fiercely opposed by Israel. This knowledge contributed to Thursday's rise in oil prices. The prospective easing of U.S. sanctions on Iranian oil, which may enhance crude exports by up to one million barrels per day, is at stake.


As reported by Reuters on Thursday, Asia's factory activity dropped in August as China's zero-COVID regulations and cost limits continued to damage businesses, dimming the outlook for the region's weak recovery.


Baoan, the most populous district of Shenzhen, suspended large-scale events and indoor entertainment for three days as the number of COVID-19 cases continued to rise.

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