Oil falls with the beginning of trading and mixed situations in Asia


Oil falls with the beginning of trading and mixed situations in Asia

Oil falls with the beginning of trading and mixed situations in AsiaTrading began on the first day of the week,
as the Corona pandemic still seems to be the biggest dominator on markets,
especially the oil market and stock markets in Asia.


In this report, Evest is following up on the latest developments for markets and transfers them in detail for you.


Fears of the outbreak of the Covid-19 virus in Asia are pressuring oil

Oil prices declined on the first day of trading this week,
as concerns about the Covid-19 virus still seem to cast their shadows.


The partial drop in prices has been affected by the high infections of the Covid-19 virus in Asia,
particularly in India, the world’s third-largest oil importer, besides fears that restrictions on oil demand may be adversely affected.


The price of a barrel of Brent oil which rose to $68.89 on Friday, was traded at $68.71.

Brent oil has been traded at $68.52 a barrel today, down by 0.28%.

Meanwhile, a barrel of West Texas crude oil found buyers at $65.27.


The market continues to monitor the epidemiological situation in Asia,
as more and more countries are tightening quarantine restrictions.

Singapore and Taiwan

This increase in cases of Coronavirus infections has been observed, in particular, in Singapore and Taiwan.

Singapore introduced new restrictions on May 14th to contain the spread of the disease.

The Taiwan authorities raised the epidemiological threat level in Taipei on Saturday.


In the Indian capital, quarantine procedures were extended until May 24th.

Restrictions were extended in other parts of India, including the states of Maharashtra and West Bengal.

Indian Ministry of Health

According to the statement issued by the Indian Ministry of Health, 281,000 and 286 new cases of Covid-19 have been monitored during the last 24 hours, and 4,000 and 106 people have died because of the virus.

In the county where the total number of cases has risen to 24 million and 965,463,
the total number of HIV deaths has reached 274,390.


In India, where experts warned that the actual number of cases and deaths may be much higher than reported,
the epidemic was said to be moved from major cities to rural areas.

Covid-19 virus in Japan

On the other hand, it has been announced that Hokkaido, Okayama, and Hiroshima states,
as the cases of infections by the Covid-19 virus in Japan, have been in a state of emergency.


Thus, the state of emergency has been extended throughout the country to 9 states.

Under the state of emergency, which will last until May 31st in all regions,
restaurants and bars are allowed to remain open until 8:00 p.m at the latest, but alcohol is not allowed to be sold.


Motu Toseru, Executive Chairman of the Tokyo Olympics Organising Committee, indicated that,
if necessary under the Covid-19 measures, the number of external officials would be reduced to 90,000 and,
if cases increased, that figure would also be reduced.

Taiwan administration

For its part, On Saturday, the Taiwan administration announced new restrictions due to the recent increase in Covid-19 cases.

Within the scope of the new restrictions, it was reported that a maximum of 5 people could meet indoors and that social activities were limited to 10 people in open spaces.


So far, government officials have not taken a decision to completely close,
but they warn people asking them to stay at home and not panic.


The return of work in Colonial relieves fears

There is a fact that restarting the pipeline in Colonial, which was exposed to an electronic attack in the United States,
relieves fears of supply, as it is still affecting prices.


Pipeline operations, which transport gasoline and other fuels from Houston to New York port have been temporarily suspended on May 7 due to an electronic attack.

At the start of operating the 9,000 kilometers pipeline on Thursday,
fuel supplies continue to be gradually provided to under-supplied stations.


The experts warn of the negative risks of oil prices due to the situation of Covid-19 in Asia,
but they noticed that the market is supported by increasing demand in the United States and Europe.

They expect Brent crude futures to be traded at around $69 a barrel.


Meanwhile, data from US oil services company Baker Hughes,
which was published on Friday, showed an increase in the number of oil and gas platforms operating in the United States last week by 5 units to reach 453 drilling platforms.

Oil market

The situation in the oil market remains contradictory.

On the one hand, oil prices have significantly increased during recent months.

The main catalyst was the less serious case of Corona in large economic regions such as the United States of America or Europe.

This has enhanced prospects for sustained economic recovery while increasing energy consumption.


On the other hand, the situation of Corona remains tense in many countries.


In terms of supply, Iran is preparing to increase oil exports. This indicates that talks with the United States about returning to the nuclear agreement and ending sanctions are going better than expected.


The positive development of the United States economy also suggests that the shale industry will also provide more oil again.


A “red” week for American indicators

Stock indexes in the United States rose by 1.1-2.4% on Friday, but the week ended in a decrease.

Last weekend, the Dow Jones index lost 1.1%, and the Standard and Poor’s 500 index lost – 1.4%.

The Nasdaq index decreased by 2.3% amid sales in technology stocks.

Last week, pressure on the US stock market was triggered by data on US inflation acceleration in April.


Last week, Fed officials announced that they expect inflationary pressures to be temporary,
making it premature to end the assets buyback program or raise interest rates.


Data released by the Federal Reserve Board on Friday showed a weaker than expected growth in US industrial production in April.


An expected deterioration in consumer confidence was found in the United States due to inflation concerns (the initial morale index fell to 82.8 points in May, while growth forecasts were up 90.4 points from 88.3 points in April).


This week’s economic agenda

A large number of events are expected this week: The Euro group meeting will be held today.


The United States will publish the Manufacturing Activity Index from the Federal Reserve Bank of New York for May; on Tuesday, the Euro zone will also announce a change in GDP and employment for the first quarter.


On Wednesday, the Euro zone will publish the Consumer Price Index for April,
and the United States will publish the April meeting minutes for FRS.


On Thursday, the Philadelphia Federal Industrial Index for May, and data on changes in the number of unemployment benefits will be released.


On Friday, Eurozone countries and the United States will publish business indicators in the manufacturing and services sectors for April.


The Conditions are mixed in Asia

Stock index dynamics varied in Asia today, as the Japanese Nikkei 225 index declined by 0.9%,
while China’s Shanghai Composite index fell by 0.7%, but in Hong Kong, Hang Seng Index fell by 0.7%, too.


The Japanese government declared a state of emergency regarding the spread of the Covid-19 pandemic in 3 other provinces of the country (Hokkaido, Okayama, and Hiroshima) from the period May 16 to May 31.


On the other hand, Japan’s producer prices rose in April by 3.6% on an annual basis (the highest rise since September 2014) and by 0.7% on a monthly basis. Analysts on average expected an increase of 3.1% and 0.5% in a row.

China’s economic

China’s economic activity slowed somewhat in April after a sharp jump in last month.

Retail sales jumped by 17.7% on an annual basis, against expectations of a growth of 24.9% after rising by 34.2% during March.


Retail sales rose for the ninth month in a row in April, but the rate of increase was the lowest since December last year.


Chinese industrial production increased by 9.8% last month, after a jump of 14.1% during March, the result was in line with expert’s expectations.


Oil falls with the beginning of trading and mixed situations in Asia