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June 17th - The Federal Reserve will announce its first interest rate decision this Wednesday under the leadership of new Chairman Kevin Warsh. What he says and doesnt say will provide clues to the market, offering a glimpse into the Feds communication style he promises to change. Market observers will closely watch the wording of the post-meeting statement and any stylistic adjustments the new chairman may make. They also want to know if Warsh intends to continue holding post-meeting press conferences. Furthermore, it is expected that Warsh will push forward several reforms he has previously promised, including reducing the Feds balance sheet and refocusing the Fed on monetary policy. James Grant, editor of Grant Interest Rate Watch, believes that Warsh should confront and clean up the most unsavory aspects of the Feds own finances. He also suggests storing some gold in the Feds underground vaults to make it look more respectable. The Fed currently does not hold any gold. Grant also stated that if the Treasury stopped covering the Feds losses, it would have gone out of business long ago; the Fed is effectively insolvent. A closer look reveals that the Federal Reserves losses on fixed-income assets and bonds far exceed the amount it lists on its shareholders equity books.On June 17, the International Energy Agency (IEA) stated that the oil supply shock in the Gulf region is expected to cause a significant drop in global oil demand before oil supplies in the Strait of Hormuz gradually normalize, with supply projected to rebound to 8 million barrels per day by 2027. The IEA noted that while the interim agreement to be signed this week by the US and Iran represents the most significant breakthrough in negotiations since the outbreak of the war, a full restoration of supplies through this vital waterway is expected to take several months. The organization now projects that global oil demand will decline by 1.1 million barrels per day this year due to high oil prices and severe supply disruptions, compared to a previous forecast of a 420,000 barrel per day decline. With the normalization of trade, lower oil prices, and an improved economic outlook, demand is expected to rebound to 2 million barrels per day next year. The IEA stated, "While the details of the agreement are still pending clarification and several issues remain unresolved, this is an encouraging step forward. However, a full restoration will not happen overnight, as mines need to be cleared from major shipping lanes and supply chains will need time to return to normal."Intel (INTC.O) shares rose 5.2% in pre-market trading as the companys new manufacturing technology entered the initial production phase.On June 17th, the Shanghai Stock Exchange announced that companies producing large-scale AI models will be eligible for the fifth set of listing standards for the Science and Technology Innovation Board (STAR Market). Issuers should hold a prominent and leading position in the field of large-scale AI models, occupy an important position in the industry chain, play a leading and exemplary role in the industry, and gain high recognition from relevant market players. The issuers large-scale AI model business or products should have a clear target market with significant current or potential demand, outstanding competitive advantages in R&D progress and key indicators, a large market space, and strong future growth potential. Issuers should formulate clear commercialization plans for their large-scale AI model business or products. Issuers should not have any matters that could have a significant adverse impact on their ability to continue operating, such as insufficient commercialization expectations for their large-scale model business or products.The Hang Seng Index closed down 181.79 points, or 0.74%, at 24,312.16 on Wednesday, June 17; the Hang Seng Tech Index closed up 10.42 points, or 0.22%, at 4,669.07 on Wednesday, June 17; the H-share Index closed down 96.02 points, or 1.17%, at 8,144.03 on Wednesday, June 17; and the Red Chip Index closed down 78.32 points, or 1.84%, at 4,171.83 on Wednesday, June 17.

Ukraine Will Block A Crucial Russian Gas Transit to Europe, Blaming Russia

Charlie Brooks

May 11, 2022 09:46

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Ukraine said on Tuesday that it will cease the flow of gas via a transit point that, according to Kiev, sends over one-third of the fuel piped from Russia to Europe through Ukraine. Kiev blamed Moscow for the action and said it would redirect the flows elsewhere.


Even after Moscow's invasion, Ukraine has remained a significant transit route for Russian gas to Europe.


The operator of Ukraine's gas infrastructure, GTSOU, has declared "force majeure" and will cease shipments through the Sokhranivka route as of Wednesday. "Force majeure" is a provision triggered when a firm is affected by circumstances beyond its control.


However, Gazprom (MCX:GAZP), which has a monopoly on Russian gas pipeline exports, said that it was "technologically impossible" to move all volumes to the Sudzha connecting point farther to the west, as GTSOU requested.


GTSOU CEO Sergiy Makogon told Reuters that Russian occupation troops have begun transporting gas flowing through Ukraine to two rebel territories supported by Russia in the country's east. He failed to provide proof.


The company stated that it was unable to operate at the Novopskov gas compressor station due to "the interference of the occupying forces in technical processes," adding that it could temporarily redirect the affected flow to the Sudzha physical interconnection point, which is located on Ukrainian territory.


Ukraine's suspension of Russian natural gas shipments via the Sokhranivka route should have no effect on the local Ukrainian market, according to Yuriy Vitrenko, the president of the state-owned energy business Naftogaz.


The national gas company of Moldova, a tiny country on Ukraine's western border, said that neither GTSOU nor Gazprom had notified them of a supply interruption.


Russian army and separatist militants have controlled the Novopskov compressor station in the Luhansk area of eastern Ukraine since shortly after Moscow launched a "special military operation" in February.


GTSOU said that it is the first compressor in the Ukraine gas transit system in the Luhansk area, the transit route for about 32,6 million cubic metres of gas per day, or a third of the Russian gas transported to Europe through Ukraine.


To fulfill its "transit responsibilities to European partners in full," GTSOU said that it will "temporarily move unavailable capacity" to the Sudzha interconnection point.


Gazprom said it had received information from Ukraine that the nation will cease gas transit to Europe through the Sokhranivka interconnector at 7:00 a.m. on Wednesday local time.


The Russian corporation said that it observed no evidence of force majeure or impediments to business as usual. Gazprom emphasized that it was fulfilling its commitments to European gas purchasers.


As punishment for the invasion of Ukraine, the United States has pushed other nations to reduce their reliance on Russian energy and has prohibited Russian oil and other energy imports.


Ned Price, a spokeswoman for the U.S. State Department, said that Tuesday's declaration does not alter the "as soon as feasible" schedule for reducing global dependency on Russian oil.

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