In the early morning of January 20, the United States and the United Kingdom issued a joint statement saying the two countries would start negotiations to resolve the trade dispute arising from the United States imposing tariffs on imported steel and aluminum.
At the invitation of Russian President Vladimir Putin, Iranian President Lehi arrived in Moscow on January 19 to begin a two-day visit. This is Lehi's first visit to Russia since he took office in August last year, and the media of the two countries have paid great attention to it. Some analysts said that during this visit, the cooperation between Russia and Iran in the military technology, economic and trade fields attracted the most attention.
U.S. President Joe Biden said inflation is closely linked to supply chains, that progress has been made in speeding up access to materials, and that efforts are being made to increase oil supplies. Biden said it's clear now that the tax and spending plans are being spun off.
According to Xinhua Net, after verification and investigation, in June 2006, PetroChina Fuel Oil Company sold 400,000 tons of imported crude oil to Shandong Binhua Group in the name of "blended fuel oil", which led to the scalping of imported crude oil. Over the years, PetroChina has sold a total of 179.5 million tons of imported crude oil to 115 refining enterprises, during which the main leaders of CNPC have seriously derelicted their duties. PetroChina's resale of imported crude oil violates the "Administrative Licensing Law" and other laws and regulations and the relevant regulations on the management of crude oil products, seriously violates the national industrial policy, seriously disrupts the order of the oil market, encourages the blind development of backward production capacity of refining enterprises in violation of regulations, encourages some local refining projects to be approved in violation of regulations, undermines the market environment for fair competition, indirectly causes the loss of state finance and taxation, and seriously corrupts the party style and social atmosphere.
Expectations of fed interest rate hikes or acceleration were at the top, the three major US stock indexes opened high and went low, and the Dow indicator hit a new one-month low. As of the close of the morning, the NASDAQ closed down 1.15%, a new low since mid-October last year; the Dow closed down 0.96%, and the S&P 500 closed down 0.97%, both hitting a one-month low.
LME non-ferrous metals closed up collectively, nickel rose 5.02% in the LME period, copper rose 1.49% in the LME period, aluminum rose 0.94% in the LME period, zinc rose 0.71% in the LME period, and lead rose 1.51% in the LME period. In terms of agricultural products, CBOT corn rose 1.84%, CBOT wheat rose 3.38%, CBOT soybean oil rose 2.86%, CBOT soybean meal rose 2.13%, and CBOT soybean rose 2.20%.
International oil prices and international gold prices closed higher. As of the close of the morning, New York February crude futures were up 1.79% at $86.96 a barrel, and Brent March crude futures were up 1.06% at $88.44 a barrel. COMEX February gold futures closed up 1.70% at $1843.20 an ounce.
The UK and the US will launch steel and aluminium tariff negotiations
The two sides did not disclose a specific date or timeline for the talks, but the talks will involve global steel and aluminum overcapacity, including the U.S. imposition of tariffs on metals from Britain. It is reported that the negotiations will also involve a 25% retaliatory tariff imposed by the United Kingdom on U.S. products, including whiskey, motorcycles, jeans and tobacco.
U.S. Commerce Secretary Raimondo and U.K. Secretary of State for International Trade Trevy llan said in a joint statement: "The distortions caused by overcapacity pose a serious threat to the market-oriented steel and aluminum industries in the US and the UK, as well as to workers in these industries." "The U.S. could remove steel tariffs on the U.K., a move that promises to put an end to retaliatory tariffs on U.S. whisky."
The U.S. Distillery Council welcomed the announcement, with the industry group citing data saying U.S. whiskey exports to the U.K. have fallen by more than half since 2018.
A British government source said britain would continue to rebalance U.S. products until the two countries reached an agreement and would not hesitate to take any necessary action to protect the steel and aluminium industries, which are vital to Britain.
In March 2018, the Trump administration imposed tariffs of 25 percent and 10 percent, respectively, on steel and aluminum, including those in the European Union, the United Kingdom, and Japan, under a national security provision of the 1962 Trade Act.
Before negotiations with Britain began, the United States and the European Union reached an agreement last October that Washington would ease tariffs imposed on the European Union. However, since the United Kingdom was still a member of the European Union when the United States imposed tariffs on the European Union, and the United Kingdom has now officially left the European Union, the tariffs are still valid for the United Kingdom and require separate negotiations between the United Kingdom and the United States.
The joint investigation team of the State Council seriously investigated and handled the issue of cnpc fuel oil company selling imported crude oil
Promoting all kinds of enterprises to operate in strict accordance with laws and regulations and strictly implementing the state's macroeconomic regulation and control and industrial policies is an important foundation for creating a market-oriented, law-based, and international business environment, and an important content for improving the socialist market economic system. In accordance with the relevant laws, regulations and policy documents of the state, the recent audit of the National Audit Office found that the fuel oil company under China National Petroleum Corporation (hereinafter referred to as the fuel oil company) had the problem of reselling imported crude oil, and in accordance with the deployment of the Party Central Committee and the State Council, the joint investigation team of the State Council carried out verification and investigation in accordance with laws and regulations, objective and fair, and seeking truth from facts.
After verification and investigation, in June 2006, the fuel oil company sold 400,000 tons of imported crude oil to Shandong Binhua Group in the name of "blended fuel oil", which led to the resale of imported crude oil by PetroChina. Over the years, PetroChina has sold a total of 179.5 million tons of imported crude oil to 115 refining enterprises, during which the main leaders of CNPC have seriously derelicted their duties. PetroChina's resale of imported crude oil violates the "Administrative Licensing Law" and other laws and regulations and the relevant regulations on the management of crude oil products, seriously violates the national industrial policy, seriously disrupts the order of the oil market, encourages the blind development of backward production capacity of refining enterprises in violation of regulations, encourages some local refining projects to be approved in violation of regulations, undermines the market environment for fair competition, indirectly causes the loss of state finance and taxation, and seriously corrupts the party style and social atmosphere.
After the Central Discipline Inspection Commission and the State Supervision Commission have seriously investigated the dereliction of duty and dereliction of duty of relevant party organizations and party-member leading cadres, the party group of PetroChina bears the main responsibility, the fuel oil company bears direct responsibility, and the relevant functional departments of PetroChina bear the responsibility of supervision. The relevant leading cadres, functional departments and relevant responsible comrades of the fuel oil company of CNPC have not correctly performed their duties and responsibilities and bear corresponding responsibilities. In accordance with the decision of the CPC Central Committee and the State Council, the relevant departments have seriously dealt with the problem of PetroChina's resale of imported crude oil in accordance with laws and regulations, discipline and law, and have recovered the illegal profits from PetroChina's resale of imported crude oil.
Iranian President visits Russia to enhance bilateral relations
According to the Russian News Agency reported on the 19th, Putin met with Lehi in the Kremlin on the same day. Putin said that even in the context of the pandemic, the total trade between Russia and Iran has increased by 38%. He said that the Russian side wants to understand Iran's position on the issue of restarting the Iranian nuclear agreement and the situation in Afghanistan. Lehi said Iran wants to maintain stable and comprehensive relations with Russia, and That Iran-Russia cooperation in Syria to combat terrorism can create preconditions for expansion and application in other areas. Iran and Russia could create synergies in cooperation to better withstand Western pressure. Lehi thanked Putin for his help in Iran's accession to the SCO and stressed that Iran and Russia can significantly strengthen cooperation in the economic field. Iran submitted a draft 20-year strategic cooperation agreement to Russia.
According to Iran's Tasnim News Agency reported on January 19, before the departure of the day, Lehi told reporters at the airport that the purpose of the trip is to promote regional diplomacy, considering the relationship between the two countries in the political, economic and trade fields, the visit to Russia will become a turning point in the relations between the two countries. Lehi said that the visit is mainly concerned with bilateral relations between Iran and Russia, especially in the political, economic, energy, trade and aviation fields, considering the huge potential of the two countries, the interaction and cooperation between the two countries will help safeguard the common interests of both sides, help curb unilateralism in the world and create regional security and stability. According to reports, Lehi will deliver a speech in the Russian State Duma (the lower house of parliament) on the 20th and meet with the Iranian people in Russia. The Iranian Minister for Foreign Affairs, the Minister of Finance and Economic Affairs and the Minister of Petroleum accompanied the delegation on the delegation.
IEA monthly report is optimistic about oil demand in 2022, and international oil prices are approaching $90 / barrel
Since the end of December 2021, the international oil market has risen by more than $10 / barrel in about half a month, breaking a new high since the end of 2014. As of the close of the morning, New York February crude futures were up 1.79% at $86.96 a barrel, and Brent March crude futures were up 1.06% at $88.44 a barrel.
On Wednesday, the International Energy Agency (IEA) said the global oil market situation appeared to be more tense than expected, and surprisingly, the Omiljung strain had little impact on demand but caused supply disruptions.
The IEA said in its monthly report that global market supply is decreasing this year, and oil demand is slightly higher than last month and is expected to reach 99.7 million b/d, about 200,000 b/d higher than in 2019. In December 2021, the IEA expects oil demand in 2022 to be roughly on par with pre-pandemic levels.
The IEA raised its global daily oil demand forecasts by 200,000 b/d for both 2021 and 2022, with global oil demand increasing by 5.5 million b/d in 2021 and 3.3 million b/d in 2022.
The IEA said the number of COVID-19 infections was another record, but this time, the impact on oil consumption demand was even smaller.
In addition, another factor in the IEA's forecast for higher oil demand is the global energy crunch and soaring natural gas prices. The IEA said soaring natural gas prices led to increased demand for oil, a trend that added 100,000 bpd last month.
At the same time, oil supplies are constrained, making it difficult for OPEC+ to resume suspended production, while producers in other regions have experienced a series of disruptions that have weakened spare capacity. Last month, global oil supply increased by 130,000 barrels per day to 98.6 million barrels per day.
In the early morning of January 20, the United States released the latest API crude oil inventory data. The data showed that the US API crude oil inventory increased by 1.404 million barrels in the week of January 14, Cushing crude oil inventory decreased by 1.496 million barrels, gasoline inventory increased by 3.463 million barrels, and distillate oil inventory decreased by 1.179 million barrels.
"The international oil market is rising continuously, mainly because the supply and demand side are supportive, providing momentum for the upward price." On the supply side, the geopolitical atmosphere is tightening, the situation in Kazakhstan is volatile, and the superimposed market is worried about the political situation in Ukraine, and the supply is expected to tighten, bringing support to the oil market. On the demand side, the low inventory of US crude oil superimposed on the supply problem of natural gas in Europe, and the demand for crude oil in winter is still good. Short-term crude oil remains high, easy to rise and difficult to fall. Huishang Futures analyst Liu Jiao said.
In the view of Zhong Meiyan, director of everbright futures energy, the fragility of supply has boosted the rise in oil prices, from Ecuador to Libya, OPEC supply production potential is insufficient, the market is still worried about the supply side, OPEC as a whole only increased production by 90,000 barrels / day in December. Geopolitical factors ignited risk sentiment in the oil market, with Houthi militants in Yemen claiming a drone strike against the UAE on Monday, sparking an explosion and fire on the outskirts of the capital Abu Dhabi, killing 3 people. Strong explosions and fires broke out on Tuesday night in the Iraqi-Turkish pipeline, which fortunately did not last long, and gradual recovery began on Wednesday afternoon.
"These factors have all contributed to an acceleration in oil prices to the upside in the last three trading weeks. At present, we need to pay attention to the spillover effect of funds, the rise in oil prices is more of a 'strong reality' of trading high inflation in the United States, and interest rate hikes cannot be cashed in a short period of time, and there is a policy vacuum. Zhong Meiyan said.
According to EIA data, as of December 2021, the global crude oil supply gap is still 2.81 million barrels per day, and the pattern of tight supply and demand continues. Liu Jiao believes that in 2022, global oil demand is still dominated by recovery, the market is generally optimistic about the demand prospects, although there are macro factors to disturb, but the current geopolitical tension has escalated again, short-term supply tightening pattern is difficult to change.
"At present, the overall fundamentals of crude oil are still in tight balance, and the steady increase in OPEC production is expected, but the slow increase in production is realistic, so there is a certain expectation difference, and the supply is still fragile." The resilience of demand is reflected in the fact that inflation due to easing liquidity remains high and economic growth remains positive. Data terminal verification needs to look at the inventory, the current crude oil and refined oil inventory fork, the U.S. refined oil inventory inflection point ahead of the crude oil inventory inflection point appears, but need to pay attention to the winter weather factors of the tail impact, the fermentation of natural gas prices, will be the short-term oil prices are difficult to fall factors. Zhong Meiyan said.
Looking forward to the future, Zhong Meiyan expects that the first quarter will show a structure of high and low, currently pointing directly at $90 / barrel, March or the market inflection point, the demand margin weakened and the supply repair will make the balance sheet from tight to loose, so oil prices are also facing downward pressure.
"On the whole, the continuation of the strong pattern of tight supply and demand may be large, and the demand for crude oil in winter is still expected to be good, as long as the risk appetite does not cool down, there is still a possibility of rising in the short term." If the international oil market wants to take a turn, it still needs to wait for new bearish guidance, which is easy to rise and fall in the near future. Liu Jiao said.
Will Indonesia restrict palm oil exports?
On January 19, the domestic commodity futures market rose widely, and as of the afternoon close, the tracking domestic commodity market composite index closed at 201.85 points, up 2.73 points or 1.37% from the previous session. Among the rising varieties, the main contract of thermal coal closed up 6.63%; the main contract of iron ore and asphalt rose by more than 4%; the main contract of methanol, urea, glass, Shanghai silver and thread rose by more than 3%; and the main contract of hot coil, pulp, fuel oil and soda ash rose by more than 2%. In terms of falling varieties, the Main Shanghai Lead contract closed down 0.77%; the main pig contract closed down 0.68%.
Boosted by Indonesia's demand for palm oil exporters to obtain export licenses, the price of palm oil on the plate has once again risen strongly, driven by the rise of international crude oil, and the price center of gravity of the three major oil varieties has been rising recently. As of the close, the main horse palm oil contract rose 1.81% to close at RM5125/tonne, while the inner palm oil main contract 2205 rose 1.75% to close at 9286 yuan/tonne.
According to media reports, indonesia's trade minister recently said that palm oil exporters are required to obtain export licenses; they also require producers to declare the supply to the domestic market, and if the country's producers fail to declare, they will not be able to export. The policy will be implemented next week. However, on the afternoon of January 19, Indonesian trade ministry officials denied plans to restrict palm oil exports.
"As the world's largest producer of palm oil, Indonesia has introduced export restriction policies aimed at curbing soaring domestic edible oil prices and controlling inflation to ensure security of supply. Indonesia introduced a high palm oil export tax in 2021, pushing up palm oil prices. In 2021, the global vegetable oil soared, and the price of palm oil soared by 33%. Inflation in Indonesia peaked at 1.87 percent in December, the highest in the past year and a half, with vegetable oil prices pushing up inflation. New Era Futures analyst Wang Chen said.
It is understood that in the context of lower than expected output in 2021 and high prices of major international vegetable oils, the price of local palm oil in Indonesia has continued to soar since 2021, up about 40% year-on-year. Based on this, Indonesia is considering limiting palm oil exports and increasing subsidies for edible oil prices.
"On the one hand, in order to curb the soaring domestic edible oil prices, control inflationary pressures. Since November last year, Indonesia has raised its palm oil export tariffs (DUTY) and export duties (LEVY) to extremely high levels. However, after the rebalancing of international supply and demand, the effect of Indonesia's high tariffs weakened, which instead raised the pricing center of gravity of international palm oil. Market-based measures have limited effect, or one of the reasons why the Indonesian government has taken administrative measures to control the supply and demand of palm oil. On the other hand, it may also be Indonesian President JokoWi's 'resource nationalism' that is tentative in the field of palm oil. Indonesia's president has tried to boost employment and incomes for his people by restricting the export of low-end raw materials and encouraging the country to increase the added value of exports. The previous restrictions on exports of Indonesian coal and Indonesia's planned export tariffs on nickel iron are also related to this. Earlier, Indonesia also said it may gradually ban the export of crude palm oil. Xinhu Futures analyst Chen Yanjie said.
However, Chen Yanjie said that at present, it is not understood the conditions for Indonesian palm oil exporters to obtain export licenses, and if the conditions are more stringent, it is expected to affect the export volume and export rhythm of Indonesian crude palm oil for a period of time. Therefore, the actual impact of the policy on the supply and demand and price of international palm oil depends on the details of the Indonesian government's subsequent policies, such as the conditions for the issuance of export licenses and the number of issuances.
It is worth mentioning that the recent international oil prices have risen continuously and touched a new high of 7 years, and oil varieties have also followed the rise of crude oil.
"In recent years, the application of oils and fats in biodiesel has become more and more extensive. Indonesia plans to conduct a road test of B40 biodiesel next month. A senior Indonesian energy ministry official said road testing of a biodiesel project B40 using 40 percent palm oil content was planned to begin in February. The promotion and application of biodiesel has made the correlation between oil and fat prices and crude oil prices more and more high. According to statistics, the correlation coefficient between crude oil and palm oil in the past 10 years has reached 0.66. Therefore, with the rise of oil prices, the prices of the three major oils and fats have further risen. Wang Chen said.
However, in Chen Yanjie's view, at this stage, the impact of crude oil on vegetable oil prices is more of an impact on sentiment or medium- and long-term expectations, and the transmission through supply and demand fundamentals is very weak.
She explained that when there is a commercial profit on biodiesel, the price of vegetable oil, which is mainly vegetable oil, is very highly correlated with the price of crude oil. At this time, the higher the price of crude oil, which means that the relative price of biodiesel is lower and the relative demand is better. However, when the commercial profit of raw firewood is negative, the supply and demand of major vegetable oils mainly depend on the government's blending targets and price subsidies for raw firewood. At this time, the price correlation between the two is relatively low.
"At present, although the price of crude oil continues to rise, the price of major vegetable oils is also the highest in more than ten years, and the commercial profit of raw wood has been significantly inverted." At present, Indonesia's palm oil firewood plan promotes subsidies that rely on export levy, and soybean oil raw firewood production relies on subsidies from RIN markets, tax relief and other measures. Chen Yanjie said.
In addition, the current accommodative monetary policy of the world's major central banks has pushed up inflation levels, and in December 2021, the US Consumer Price Index (CPI) rose 7% year-on-year, a new high in nearly 40 years, and the price of imported raw materials such as oils and fats denominated in US dollars rose. Wang Chen said. The macro environment of high inflation has pushed up the price of oil and fat, allowing oil and fat to remain high.
"Although global inflation will inevitably be transmitted to vegetable oil prices, the current high price of vegetable oil at home and abroad is more of a supply problem, and inflation, monetary factors and macro have less impact on agricultural product prices than industrial products." Chen Yanjie said that at this stage, the international palm oil inventory is still at a historically low level, the international rapeseed production can not be solved for the time being, the international sunflower oil due to the export tariffs of the main producing countries and farmers' reluctance to sell and other reasons, although the output has increased, but the export is small. International soybeans are still low stocks or expectations, and there is still great uncertainty about south American soybean production.
On the domestic side, Chen Yanjie said that soybean oil and palm oil inventories are also at an almost lowest level in history, and although domestic vegetable oil inventories are relatively high, the expectation of continuing to reduce the inventory in the later period is more certain.
This article originated from Futures Daily
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