During the Asian session on Tuesday (May 10), U.S. oil is now trading at $102.93 a barrel; oil prices plunged nearly 7.5 percent on Monday as the European Union shelved plans to ban imports of Russian crude, global financial markets have been nervous about interest rate hikes and recession fears, the spread of the epidemic has exacerbated concerns about the outlook for demand, and the sharp decline in U.S. stocks has further dragged oil prices lower.
The focus of the day is on fed officials' speeches, with the EIA releasing the monthly short-term energy outlook report at 00:00 on Wednesday and API data released at 4:30.
Negative factors affecting oil prices
[EU shelves plans to ban imports of Russian crude oil]
According to the Financial Times, the EU shelved plans to ban imports of Russian crude oil due to a failure to reach an agreement with key partners on the imposition of sanctions. However, the European Commission still intends to prohibit European companies from providing insurance for tankers carrying Russian oil in order to limit Russia's crude oil transportation capacity. European Commission President von der Leyen traveled to Budapest on Monday to discuss a phased ban on Russian crude. According to sources, the idea of banning the import of crude oil, lobbied vigorously by Malta and Greece, has now been shelved. During the talks, member states raised the issue that an effective ban should involve other countries such as the United States and the United Kingdom, especially the United States exerting influence over countries such as Liberia, the Marshall Islands and Panama.
Rohan Reddy, head of research at GlobalManagement, said sanctions on Russian oil weakened and affected Russian oil supplies would also decrease, highlighting the complexity of imposing sanctions on Russian energy exports. The resistance to sanctions by some EU member states, such as Hungary and Slovakia, could mean that the EU may need to rethink its original sanctions regimen. Oil will continue to "range volatility" as the market is still undersupplied at the moment. Unless there is a major spread of COVID-19, supply shortages will continue.
[The S&P 500 closed below 4,000 for the first time since March last year]
The S&P 500 in U.S. stocks closed below 4,000 on Monday, the first time since March 2021, as the Nasdaq plunged more than 4 percent in a sell-off triggered by large growth stocks, heightening investors' concerns about rising interest rates.
The Nasdaq closed at its lowest level since November 2020. Apple tumbled 3.3 percent, the biggest drag on the Nasdaq and S&P 500. Microsoft plunged 3.7 percent and Tesla plunged 9.1 percent. Investors worry about the extent to which the Fed needs to act aggressively to curb inflation. The Fed raised interest rates by 50 basis points last week. The benchmark 10-year US Treasury yield initially hit its highest since November 2018 and then softened.
Kristina Hooper, Chief Global Market Strategist at Invesco, said: "The market is digesting and beginning to return to a more normal monetary policy environment. More aggressive action (on interest rates) could trigger a recession, especially in all of these complex scenarios, high inflation, conflicts between Russia and Ukraine, and disruptions in supply chains related to the pandemic. ”
The S&P 500 has fallen 16.3% so far this year. Technology and growth stocks have been hit the hardest in recent sell-offs, and their valuations are more dependent on future cash flows. Of the 11 sectors of the S&P 500, only consumer staples rose, up 0.1 percent. Energy stocks plunged 8.3 percent, following the decline in oil prices.
[Indonesia reported 15 severe cases of hepatitis of unknown etiology]
The Ministry of Health of Indonesia reported 15 severe cases of hepatitis of unknown etiology on the 9th. The country reported 3 deaths from hepatitis of unknown etiology a week ago. Indonesian Health Minister Buddy Gunadi Sadikin said at a press conference on the same day that Indonesia found 15 cases of severe cases of hepatitis of unknown etiology in a comprehensive investigation recently begun. He did not say whether the 15 cases were all children and what treatment the patients had received.
[Pakistan first detected case of new subtype BA.2.12.1 in Aomi Kerong]
On the 9th local time, the Pakistan National Institutes of Health said that Pakistan found a new subtype of BA.2.12.1 infection of the Aomi Kerong strain for the first time in Pakistan.
According to the Japanese TBS TV station reported on the 9th, on the 8th, 42,538 new coronavirus infections were added in Japan, 26 people died, and 159 people were severely infected. At present, the number of new crown infections in Japan is still showing a continuous increase trend.
According to reports, there were 4,711 new covid-19 infections in Tokyo, an increase of more than 1,500 over last week, and the number of new infections has exceeded the same period last week for two consecutive days. The number of new infections in Kagawa Prefecture reached 510 in a single day, breaking the record for the largest number of infections in the past. Okinawa Prefecture has 2,060 new infections, making it the second most infected region in Japan so far, after refreshing the highest number of infections in the past on the 7th. In addition, hokkaido has again increased the number of new infections in 10 days to more than 3,000.
【New York, USA, confirmed covid-19 continues to increase】
According to the US Chinese Network, on the 8th local time, the governor of New York, Khochur, said on social media that she tested positive for the new crown virus and would stay home for a week. Shortly before that, New York Mayor Adams was also infected with the new crown virus.
Recently, there has been a steady increase in COVID-19-positive cases in New York City and New York State. On the 7th local time, more than 9,900 people in the state tested positive, and on the 5th, it was the day with the largest number of positive cases in the state since the end of January, with a total of 13,902 positive cases reported. As of 7 July, the state's seven-day average positivity rate was 7.2 percent, up from 7 percent in the previous week.
Bullish factors affecting oil prices
[G7 commitment to gradually reduce or ban the import of Russian oil]
On May 8, local time, the G7 held the third summit of the year through video, with the participation of Ukrainian President Zelenskiy. A joint statement issued after the meeting said the G7 would gradually reduce or ban the import of Russian oil. The White House said it would deal a "serious blow" to Russia's economic arteries. At present, the parties have not given a timetable for this action.
However, some media pointed out that the G7 may not be "monolithic". Europe is much more dependent on Russian oil than the United States.
An EU source told Reuters on Monday that the European Commission was considering giving more money to landlocked eastern European countries to upgrade their oil infrastructure to persuade them to agree to an embargo on Russian oil.
Three people familiar with the matter told Reuters that German officials were quietly preparing for a sudden disruption in Russian gas supplies and would come up with an emergency plan that could include nationalizing key businesses.
[Bulgaria says it will oppose a new round of EU sanctions against Russia if it does not obtain a russian oil import exemption]
Bulgarian Deputy Prime Minister and Finance Minister Vasilev said later on the 8th that if Bulgaria cannot get an exemption from the proposed sanctions banning the import of Russian oil, Bulgaria will not support a series of new EU sanctions against Russia.
Overall, the European Union shelved plans to ban the import of Russian crude oil to stimulate oil prices to lower, the US stock market plunge dragged oil prices further down, the global epidemic spread again, demand outlook concerns increased, oil prices short-term or maintain a bearish tone, intraday attention to the EIA energy report.
This article originated from Huitong Network