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On April 26, according to the Wall Street Journal, in order to simplify the negotiations on reciprocal tariffs, US negotiating officials plan to use a new framework developed by the Office of the United States Trade Representative (USTR), which lists major categories of negotiations, such as tariffs and quotas, non-tariff trade barriers, digital trade, product origin principles, economic security and other commercial issues. In these categories, US officials will put forward specific requirements for individual countries, but people familiar with the matter emphasized that this document may also be adjusted at any time. People familiar with the matter said that the United States initial plan is to negotiate with 18 major trading partners in turn over the next two months. The initial plan is to alternately participate in the talks with six countries per week for three weeks (six countries in the first week, another six countries in the second week, and another six countries in the third week) until the deadline of July 8. If US President Trump does not extend the 90-day suspension period he set by then, those countries that cannot reach an agreement will begin to face reciprocal tariffs.On April 26, after the United States announced additional tariffs on goods from many countries, Peruvian business people expressed concerns that the US governments extreme measures would disrupt the global trade order and may even trigger a global economic recession. Alvaro Barrenechea Chavez, vice president of the Peruvian-Chinese Chamber of Commerce, said that the negative impact of the US tariff policy has begun to emerge and hoped that the US government would rethink. Recognizing the importance of countries working together to promote development, I think this is the best way to become a true "world citizen."Market news: Musks xAI company plans to raise about US$20 billion in a financing round.Conflict situation: 1. Ukrainian top commander: Russia tried to use air strikes as a cover to increase ground attacks, but was repelled by Ukraine. 2. Ukrainian Air Force: Russia launched more than 103 drones in the night attack on Ukraine. 3. Local officials said Ukraine launched an attack in the Belgorod region of Russia, killing two people. 4. The local governor said that Russia launched an attack on the Dnipropetrovsk region of Ukraine, killing one person and injuring eight people. Peace talks: 1. Trump: ① The situation between Russia and Ukraine is gradually becoming clear, and they are "very close" to reaching an agreement. ② Ukraine is unlikely to join NATO. ③ Ukraine has not yet signed the rare earth agreement and hopes that the agreement can be signed immediately. ④ It is foreseeable that the United States will conduct commercial cooperation with Ukraine and Russia after reaching an agreement. 2. Russian Foreign Minister: Russia is "ready to reach an agreement on Ukraine." 3. Russian Presidential Assistant Ushakov: Russia and the United States will continue to maintain active dialogue. 4. Russian Presidential Assistant: Putin discussed the possibility of resuming direct negotiations between Russia and Ukraine with the US envoy. 5. The differences between the United States, Europe and Ukraine are clear. The documents show that European countries and Ukraine have raised objections to some of the US proposals to end the Russia-Ukraine conflict. 6. Market news: As part of the peace agreement, the United States asked Russian President Putin to abandon the demilitarization requirement. Other situations: 1. President of Hungarys OTP Bank: We hope to return to all business areas in Russia after the (Russia-Ukraine) conflict ends. 2. Ukrainian President Zelensky: US ground forces are not necessary for Ukraine. 3. Trump said Crimea will remain in Russia, Zelensky: Never recognize it. Agreeing with Trumps view, Crimea cannot be recovered by force. 4. NATO Secretary-General Rutte met with Trump and senior US officials to discuss defense spending, NATO summit, and the Ukrainian conflict.Rising global trade risks, overall policy uncertainty and the sustainability of U.S. debt top the list of potential risks to the U.S. financial system, according to the Federal Reserves latest financial stability report released on Friday. This is the first time the Fed has conducted a semi-annual survey on financial risks since Trump returned to the White House. 73% of respondents said that global trade risks are their biggest concern, more than double the proportion reported in November. Half of the respondents believe that overall policy uncertainty is the most worrying issue, an increase from the same period last year. The survey also found that issues related to recent market turmoil have received more attention, with 27% of respondents worried about the functioning of the U.S. Treasury market, up from 17% last fall. Foreign withdrawals from U.S. assets and the value of the dollar have also risen on the list of concerns.

U.S. Gasoline Retail Prices Hit New Record as Refiners Struggle to Meet Demand

Haiden Holmes

May 11, 2022 09:52

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On Tuesday, retail gasoline prices in the United States reached another all-time high, exceeding the record set in March, as worldwide refineries struggled with a bottleneck that has pushed prices surging ahead of the summer driving season.


According to the American Automobile Association, the average price of a gallon of retail gasoline surpassed the previous record of $4.331 early on Tuesday morning.


Brent oil prices are down 7% since March 30, whilst gasoline futures are up 9.4% and set a new high of $3.7590 per gallon on Friday before retreating on Monday.


Even though the United States and other countries have made initiatives to increase the global crude supply, gasoline prices have risen as a result of both planned and accidental refinery shutdowns. As demand has returned to pre-pandemic levels, the global supply of petroleum is diminishing. Following the invasion of Ukraine and subsequent sanctions imposed on Russia by the United States and its allies, supplies tightened further.


Mike Jennings, CEO of HF Sinclair Corp, estimated on Monday's results call that the globe has lost 1 million barrels of refining capacity and 1.5 million barrels of oil supplies since the outbreak of the pandemic.


"That's 2.5% of global consumption...that's a significant figure," said Jennings.


In the spring, refineries emphasize gasoline production ahead of the onset of warmer weather and more traffic. In recent weeks, however, they have expanded distillate production to fulfill the demand for jet fuel and diesel in Europe, Latin America, and the United States, while Western sanctions against Moscow have limited Russia's exports.


Gary Cunningham, Tradition Energy's head of market research, said that refinery utilization would remain very high throughout the year on earnings calls.


This week, diesel gasoline set a pump price record of $5.45 per gallon.


Still, gasoline costs in the United States are far cheaper than in other big consumer nations, such as the United Kingdom, Japan, and France, where greater taxes raise the price of fuel.


Patrick DeHaan, head of petroleum analysis at GasBuddy, said, "I do not see this issue being resolved until at least 2023, when greater refining capacity comes online in the Middle East and Asia."


The price of U.S. crude oil, the greatest input cost for refiners, has declined by over $20 from its March highs, with supply bolstered by the release of millions of crude barrels from U.S. strategic reserves and demand weakened by coronavirus lockdowns in China.


However, merchandise inventories continue to decline. According to the U.S. Energy Information Administration, gasoline stockpiles have decreased by 3 percent year-over-year to 228.6 million barrels.


On Monday, the 3-2-1 crack spread, a proxy for refining profits, hit $54.34, an increase of roughly 150 percent compared to the same time last year.


Jennings said, "I believe we can anticipate that commodity prices and, in particular, pricing of our goods will be pretty high, providing the economy remains generally robust."

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