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On May 25th, the State Council announced the following appointments and removals of state personnel: Gao Song was appointed President of Peking University; Zhang Yunming was removed from his post as Vice Minister of Industry and Information Technology; Gong Qihuang was removed from his post as President of Peking University; and Gao Song was removed from his post as President of Sun Yat-sen University.On May 25th, the Hangzhou Municipal Science and Technology Bureau drafted the "Hangzhou Action Plan for Building a National AI+OPC Entrepreneurship Hub (2026-2028) (Draft for Public Comment)," the "Several Policy Measures for Building a National AI+OPC Entrepreneurship Hub in Hangzhou (Draft for Public Comment)," and the "Hangzhou AI+OPC Community Construction Guidelines (Draft for Public Comment)." These documents are now open for public comment. The draft emphasizes strengthening the supply of computing power and models. It supports OPC communities in increasing investment in AI infrastructure, collaborating with leading blockchain companies and research institutions to build lightweight AI tool platforms, and providing OPCs with low-cost computing power, models, and other services. For OPCs, it recommends utilizing AI service vouchers (computing power vouchers, intelligence vouchers, model vouchers, and terminology vouchers), appropriately increasing the subsidy ratio to offset key costs in the early stages of OPC entrepreneurship. It also explores establishing "AI product experience vouchers" to support university students in Hangzhou in experiencing AI products released by the OPC online open community. By 2028, 30 outstanding intelligent agent applications with advanced performance and successful implementation will be selected, and the city and district levels will provide no less than 1 billion yuan in artificial intelligence service vouchers.Iranian Foreign Ministry spokesman: We have no expectations of the Israeli regime, except that they will undermine any process that could ease tensions in the region.On May 25, the Belgorod Oblast Operations Command in Russia stated on social media that the region had been hit by two large-scale missile attacks by Ukrainian forces, resulting in one injury. The attacks damaged energy infrastructure and an administrative building. Reports indicate power and water outages. On the same day, the governor of the Yaroslavl Oblast in Russia stated on social media that Ukrainian forces launched a large-scale drone attack on the region overnight, injuring one person. Ukraine has not yet responded to the Russian claims.On May 25th, analysts at Natixis stated in a report that expectations for a European Central Bank (ECB) rate hike appear overly optimistic following recent data showing the fragility of the Eurozone economy. They stated, "Current pricing in ECB policy expectations remains aggressive relative to the potential deterioration of the Eurozones growth outlook." Preliminary Eurozone purchasing managers data for May, released last week, was unexpectedly weak, as high oil prices dampened consumer and business confidence. Data from the London Stock Exchange Group shows that the Eurozone money market reflects an 80% probability of a 25 basis point rate hike by the ECB in June, fully accommodating expectations of two rate hikes before the end of the year.

Next Year's Increased Oil Demand Will Drive Higher Prices

Haiden Holmes

Jan 11, 2023 10:51

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As the U.S. government anticipated record global petroleum consumption for the coming year, the dollar remained near its lowest level in seven months.


In its Short-Term Energy Outlook, the U.S. Energy Information Administration forecasts that the global consumption of liquid fuels would reach 102,2 million barrels per day in 2024, primarily due to the economic growth of India and China.


Brent futures closed at $80.10 per barrel, an increase of 45 cents or 0.6%, and U.S. crude futures settled at $75.12 per barrel, an increase of 49 cents or 0.6%.


After Federal Reserve Chair Jerome Powell refrained from commenting on monetary policy and the economy during a symposium, the markets awaited clarity regarding the Federal Reserve's plans to increase interest rates. Thursday's U.S. CPI data will provide traders with insight into the near-term possibilities.


According to Tamas Varga of oil broker PVM, Thursday's data "may easily determine the course of the financial and oil markets for the next several weeks."


Varga remarked that the currency would weaken if inflation came in lower than anticipated or the November level.


The dollar remained near its lowest level in seven months. As items denominated in dollars become more affordable for holders of other currencies, a declining dollar could enhance the demand for oil.


Fed Governor Michelle Bowman warned that the U.S. central bank will need to further boost interest rates to combat high inflation, which will likely have a negative impact on the labor market.


After China, the world's largest oil importer and second-largest consumer, reopened its borders over the weekend for the first time in three years, both WTI and Brent climbed 1% on Monday.


China also approved a second batch of crude import limits for 2023, bringing the total for this year up by 20% compared to the previous year.


Dennis Kissler, senior vice president of trading at BOK Financial, commented, "Crude is attempting to establish a bottom now that China has loosened most of its restrictions on international travel and business."


As the global economy exerts downward pressure on oil prices, many analysts predict that a resurgence in Chinese demand will only give limited assistance.


"Because the consumption upswing is still in its infancy, oil prices are likely to remain low and range-bound," according to analysts at Haitong Futures.


Barclays (LON:BARC) bank highlighted a $15-25 per barrel downside to its $98 per barrel Brent projection for 2023 if a "recession in global industrial activity similar to 2009-09 arises."


Goldman Sachs (NYSE:GS) forecasts that the Organization of the Petroleum Exporting Countries' (OPEC) enhanced capacity to increase prices without negatively influencing demand will limit downside risks to its positive oil forecast for 2023.


Separately, oil stockpiles rose by around 14.9 million barrels during the week ending January 6, according to market sources citing data issued Tuesday by the American Petroleum Institute. It was anticipated to decline by 2.24 million. EIA data is due Wednesday. [EIA/S]


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