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The head of Irans Energy Optimization Organization stated that, as part of three ongoing proposals to manage Irans gasoline supply, Iran is considering a proposal to allocate 30 liters of gasoline per person per month, with the quota being transferable and tradable.August 16th - Next week, UK consumer prices will be the focus of media attention, while the shortage of AI-powered memory chips and rising energy costs are keeping the Bank of England on high alert. Data to be released on Wednesday is expected to show inflation accelerating for the first time in four months, with a survey of economists showing a median forecast of a 2.9% jump in July. This marks the beginning of an upward trend expected to continue into the second half of the year, ending a period of positive news regarding price pressures. As the impact of the Iran war on prices becomes increasingly apparent – especially given the still strong economic performance – this data could further unsettle Bank of England policymakers. While the inflation outlook is largely dependent on developments in the Middle East, artificial intelligence is emerging as a potential "dark horse." The Bank of England has warned that the rapid expansion of AI computing power is driving up the cost of memory chips used in mobile phones, laptops, and game consoles. Data from the British Retail Consortium in July indicates that rising chip costs are being passed on to the prices of electronic products.OpenAI Codex Product Manager: Let Sol manage a high-performing team of Luna agents for you. These models know each other very well and can work together to achieve goals with amazing speed and efficiency.Market sources say that some units at the Libyan power company have stopped operating after the explosion.On August 16th, ahead of Nvidias (NVDA.O) highly anticipated $500 billion financing deal this week, investors were already concerned about approximately $70 billion in "shadow liabilities" that werent on the balance sheets of major AI companies but could surface in the worst-case scenario. With Nvidias latest move, the company may be providing tens of billions of dollars in so-called "residual value support" for debt transactions related to AI infrastructure development—essentially using its high credit rating to help control customers financing costs. With computing power demand surging, such guarantees are practically a "free lunch" for giants like Nvidia and Broadcom: they can expand sales to customers and AI companies without having to include the related debt on their balance sheets. These arrangements typically involve multiple stages: a special purpose entity borrows to purchase chips, the loan supported by cash flow generated from contracts with companies that will use the technology in the future. If the company stops making payments, the assets are re-leased or sold to repay the remaining debt. If a funding gap still exists, the guarantor makes up the difference. Theoretically, this process carries extremely low risk. However, some havent fully grasped this logic. DoubleLine portfolio manager Mariya Entina stated, "Its like playing the rules; youre trying to get special treatment from rating agencies to get the highest possible rating. Were entering an era of financial engineering. Thats one of my concerns: when financial engineering prevails, the true financial situation gets obscured."

WTI anticipates further losses below $88, as recession concerns increase and the US ISM PMI is anticipated

Daniel Rogers

Sep 01, 2022 15:29

 截屏2022-06-10 下午5.32.03_1024x576.png

 

Futures for West Texas Intermediate (WTI) on the New York Mercantile Exchange (NYMEX) are on the verge of breaking to the negative from a thin consolidation between $88.54 and 89.32 during the Tokyo session. The asset has abandoned the psychological support of $90.00 as western central banks prepare for a new cycle of rate hikes to combat inflation mayhem.

 

On worldwide markets, price pressures are intensifying. The favored inflation gauge of the European Central Bank (ECB), the Harmonized Index of Consumer Prices (HICP), has surpassed 9% due to surging energy costs.

 

The US economy's inflation rate has shown signs of weariness but continues to hover above 8.5%, which is far above the target rate of 2%. And inflationary pressures wreak the most havoc on the British economy. According to a Citi study, long-term inflation forecasts have skyrocketed to 4.8%, much over the Bank of England's (BOE) target of 2%.

 

Moreover, the dismal Caixin Manufacturing PMI data has contributed to the decline in oil prices. The economic data has been revised down to 49.5, below the consensus estimate of 50.2 and the previous report of 50.4. Notably, China is the greatest importer of oil, and a drop in oil consumption by the largest importer is sufficient to pull the price of black gold down.

 

In addition, the price of black gold has failed to profit on the recent reduction in oil inventories published by the Energy Information Administration (EIA). The oil inventories have decreased by 3,326 million barrels, as opposed to the previously stated decrease of 3,282 million barrels.

 

The US ISM Manufacturing PMI has substantial weight in today's session. The consensus forecast for economic statistics is 52, compared to the previous reading of 52.8. A recurrence of the same will increase the pressure on oil prices as recession fears intensify.

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