The Russian gas replacement is a public demand and oil ends the week at a rising edge

2022-01-30T19:05:31
New York Mercantile Exchange Oil opec US economy
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The Russian gas replacement is a public demand and oil ends the week at a rising edge

The Russian gas replacement is a public demand and oil ends the week at a rising edge: Concerns are growing about Russia’s attack on Ukraine, threatening the stability of many of the resources that Russia provides to the rest of the European Union, primarily gas. 

Evest follows market developments in the following report.

Topics:

Discussions between the United States and the European Union on the compensation of Russian gas in Russia’s attack on Ukraine

The US economy grew 6.9% in the fourth quarter of 2021

Oil ends the week at a rising edge

Expected statements and meetings

Discussions between the United States and the European Union on the compensation of Russian gas in Russia’s attack on Ukraine

United States President, Joe Biden, and European Commission President, Ursula von der,
Leyen said in a joint statement on Friday,
that the United States and the European Union are working to find alternative gas ,
supplies to European Union countries in the event of Russia’s attack on Ukraine.

“The United States and the European Union are working together to ensure a sustained,
adequate and timely supply of natural gas to the European Union ,
through a variety of sources from around the world in order to avoid shortages.

Such shortages could arise, in particular, if Russia attacks Ukraine again,” the statement said.

In addition, investors welcome continued talks between Russia and the United States ,
on Wednesday, the Russian Foreign Ministry received a written response,
from the United States calling for security guarantees proposals,
which, according to Russian Foreign Minister, Sergeĭ Lavrov,
allow for the start of a “serious conversation” about minor points. 

The European gas market continues to fight against consumers.

The Wall Street Journal wrote that more than 20 US LNG carriers ,
are heading to Europe as well as 33 other vessels ready to join.

Officials in the United States and Europe are looking for ways to find a short-term alternative to Russian supplies.

In particular, the White House administration has held talks with Japan,
South Korea and other countries to persuade them to give up already paid supplies for Europe.

In the meantime, the German government’s spokesman,
Steven Seibert, said Russia has always fulfilled its commitments ,
on deliveries and the German government believes that Russia will remain a reliable partner.

On the other hand, the market has been supported positively by ,
reducing geopolitical tension against the backdrop of statements by the Russian Ministry of Foreign Affairs on Ukraine.

 

 

The US economy grew 6.9% in the fourth quarter of 2021

The results of the Fed meeting continue to affect global investors, which concluded on Wednesday, January 26.

Federal Reserve Chairman Jerome Powell, said that members of the Federal Open Market Committee (FOMC),
intend to raise interest rates as early as March.

He also noted that the Fed was likely to raise interest rates faster than in the past.

The U.S. economy grew by 6.9% in the fourth quarter of 2021,
according to preliminary data from the U.S. Department of Commerce.

Analysts surveyed by Trading Economics predicted a 5.5% increase in the third quarter, U.S. GDP grew by 2.3%.

In the meantime, US Department of Commerce data showed that the US population’s income in December rose by 0.3% compared to the previous month.

Meanwhile, Americans’ expenditures fell by 0.6%.

Analysts predicted an increase in the first indicator by an average of 0.5%,
while the second indicator dynamics matched expectations, according to Trading Economics.

 

Oil ends the week at a rising edge

Oil prices grew during Friday’s trading after falling the previous day,

and the attention of market participants gradually shifted to the next OPEC + meeting in early February.

Brent crude futures for April on the London Futures Exchange rose by $1.08 to $89.25 per barrel.

West Texas Intermediate crude futures’ price for March ,
in electronic trading on the New York Mercantile Exchange (NYMEX) rose by 1.11% – up to $87.7 per barrel.

Both crudes could record growth for the sixth week in a row.

OPEC + meeting next week had a key role, scheduled for February 2.

The Alliance is expected to continue to adhere to the previously agreed plan,
to increase production by 400 thousand barrels per day monthly.

Expected statements and meetings

Markets are expecting to announce manufacturing and non – manufacturing purchasing manager indices for January in China.

In the meantime, the Chinese market itself will be closed for the whole week from Monday due to the National New Year,
and the Hong Kong Stock Exchange will hold short trading on Monday. 

One of the main statistics on January 31,
was the first estimate of euro area GDP for the fourth quarter next week.

In addition, moderate pressure on risky assets,
including emerging goods and currencies, may come from the strength of the United States dollar against a basket of major currencies.

Oil traders focus on the OPEC + meeting scheduled for February 2. On this day,
OPEC + 
countries  will decide to produce oil in March.

OPEC + is expected to continue to increase production by 400 thousand barrels per day monthly.

Investors also assess the prospects for balanced market supply and demand, taking into account the underlying factors.

Demand was not affected by the Covid-19 virus, which was previously a concern.

The rise was then supported by supply-side restrictions.

With the reduction of excess production capacity, it will be difficult for the market to deal with any unplanned new disruption. Investors believe that the oil market will continue to be under-supplied in the first quarter of 2022.

Traders also continue to recall the Fed’s decisions made on Wednesday – in February,
the regulator will reduce asset purchases from the market to $30 billion from $60 billion in January,
and in March will complete the entire buyback program.

 

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