- Results of previous trading July Brent crude futures: $68.46 (+3.04%)
- June WTI crude futures: $66.05 (+3.88%)
- The spread between current Brent and WTI contracts is about $3.4 in favor of Brent.
In the details, oil prices continued to recover on Monday amid declining optimism about the Iran nuclear deal, as well as positive forecasts from Goldman Sachs.
Last week, the price declined for three days in a row after statements from several senior officials from different countries that Iran and the United States had made progress in negotiations. This week, US Secretary of State Anthony Blinken made his comments.
"What we haven't seen yet is whether Iran is ready and willing to do what it has to do. We do not have an answer to this question yet," Blinken said, sowing a seed of doubt in market participants about the imminent lifting of sanctions against Iran. According to the Secretary of State, at the current stage, the countries managed to clarify what actions each of the parties should take to return to the 2015 deal.
However, a number of practical issues remain to be resolved. Iran, for its part, on Monday extended the agreement on the monitoring of nuclear facilities with the IAEA, which expired a day earlier. This was stated by both organizations.
The agreement is extended until June 24. Before the US unilateral withdrawal from the nuclear deal in 2018. Iran produced about 3.8 million b/d and exported about 2 million b/d. After the resumption of sanctions, production fell almost twice. As the Biden administration came to power, Iran began to gradually restore production, appreciating its chances of success in the negotiations. At the moment, production in the country, according to Reuters, is 2.5 million b/d, which means the potential for increasing production of about 1.3 million b/d, or about 1.3% of total global consumption.
Investment bank Goldman Sachs maintains a strong bullish view on oil, despite the threat of growth in Iranian exports. According to the bank's analysts, the market underestimates the potential for demand recovery even in this scenario. Experts note that the OPEC+ countries can compensate for any increase in production from Iran by reducing production.
The bank expects $80 per barrel of Brent in the fourth quarter due to a jump in demand, which will be driven by the opening of global economies on the background of vaccination. Global oil demand may grow by 4.6 million b/d by the end of the year, with most of the increase, according to the bank, occurring in the next 3 months.
Brent futures recovered most of last week's decline and closed Monday trading at around $68.5 per barrel. The quotes were in the same trading range where they spent most of May. The view of the instrument remains neutral. This week, the next round of US-Iranian talks will take place. If the parties reach an agreement, this may negatively affect oil prices and lead to a re-descent to the area of $66 per barrel.
Late this evening, the API will publish preliminary estimates of oil reserves in the United States. In the morning, Brent futures are trading 0.3% higher than the previous day's closing level.
The market the day beforeThe session on May 12, the main American stock exchanges ended in different directions. The S&P 500 index fell by 0.13%, reaching 3,860 points at the moment. The Nasdaq Composite and Russell 2000 rose 0.80% and 0.06% respectively, while the Dow Jones dropped 0.33%. Six of the 11 sectors in the S&P 500 closed lower. IT companies performed the worst (-1.14%), utilities (-1.16%) and representatives of the financial sector (-0.8%).Company newsCEO of FTX crypto exchange, multimillionaire Benkman Fried, bought 56.3 million shares of Robinhood (HOOD: +30%) for a total of $648.3 million, which is equivalent to 7.6% in the broker's capital.Walt Disney Company (DIS: -3%) reported worse than forecast, and also warned that the expansion of the Disney+ subscriber base may slow down in the second half of the year.Coinbase quotes (COIN: +8.9%) increase at the moment after falling by more than 40% during the week. On May 10, the company reported a large and unexpected loss for the first quarter, significantly falling short of consensus.We expectYesterday, the Senate of the US Congress approved Jerome Powell as head of the Fed for a second term. The chairman of the regulator once again stated that he could not guarantee a "soft landing" for the US economy amid the fight against inflation. He also noted that measures to prevent inflation had to be taken even earlier, and stressed that raising rates by 0.5 bps at the next two meetings is considered as a baseline scenario, although an increase of 0.75 bps if necessary is not excluded.The Treasury bond market continued to signal investors' concerns through another rate cut. 10-year treasuries lost 25 bps in a week, showing the largest drop since March 2020. The producer price index (CPI) for April increased by 0.5% mom, coinciding with analysts' expectations, while the final demand index (excluding volatile components) increased by 0.4% (consensus assumed an increase of 0.6%). On an annualized basis, these indicators increased by 11.0% (against +11.5% in March) and by 8.8% (against +9.5% in March) accordingly.The yields of two- and 10-year treasuries decreased by 13 bps and 10 bps, to 2.51% and 2.82%, respectively. The indicator for 30-year securities decreased by one point, to 2.90%.Trading on May 13 on the sites of Southeast Asia ended in the green zone. China's CSI 300 rose 0.69%, Hong Kong's Hang Seng and Japan's Nikkei 225 gained 2.42% and 2.64%, respectively. EuroStoxx 50 has been adjusted by 1.30% since the opening of the session.Brent crude futures are quoted at $106.9 per barrel. Gold is trading at $1,820 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 3900-4000 points.MacrostatisticsImportant macro statistics are not expected to be published today.Sentiment IndexThe sentiment index dropped to 35.Technical pictureThe S&P 500 broke through the long-term support level again, reaching a local minimum at 3860 points at the moment. The index was last quoted at this level on March 10, 2021. At the same time, the average trading volumes for the first months of this year significantly exceed the indicators of 2021 and 2020 (excluding the pandemic surge in volatility). The analysis of the RSI and MACD indicators indicates the short-term overheating of the "bullish" movement. 
The CEO of the social network Twitter announced the suspension of the recruitment program for new employees and other measures to reduce the company's costs. Some exceptions will be made for business-critical positions that management will determine. The company will also reduce the costs of business trips, consulting and marketing.The platform is in a state of uncertainty in anticipation of a takeover by Elon Musk. Twitter employees have found themselves in a difficult position, as many do not know whether the projects they are working on will be a priority under the new leadership.Twitter shares on the NYSE on May 12 fell by 2.19% to $45.08 per share. 
The American biotechnology company Moderna has received permission from the Swiss regulator to use a vaccine against COVID-19 for children aged 6 to 11 years. The permit was issued for a series of two doses of the vaccine of 50 micrograms per dose.Earlier, Moderna appealed to the American regulator with a request to issue a permit for the use of the vaccine for this age group. Pfizer and BioNTech's competitors have already launched a vaccine for children aged 5-11.In April, Moderna also asked the US regulator to allow the use of its vaccine for children from 6 months to 6 years. At the moment, the coronavirus vaccine has not yet appeared on the market for children under 5 years of age.Shares of Moderna on Nasdaq on May 12 rose by 5.46% to $130.17 per share. 
American car manufacturer Ford Motor Co has abandoned its plans to produce electric vehicles in India and will most likely sell its plants in the country. Ford has two car factories in the country. It is noted that negotiations on the sale of the Samand plant in Gujarat with Tata Motors are progressing successfully, and Ford is considering several applicants for the Chennai plant.Earlier this year, the company said it was exploring the possibility of manufacturing electric vehicles in India for export and possibly for sale in the domestic market.Ford shares on the NYSE on May 11 fell by 3.9% to $12.83 per share. The decline continues in the premarket. 
Entertainment giant Walt Disney reported revenue of $19.25 billion, which is 23% more than last year. However, analysts had forecast revenue of $20.05 billion. Net profit was $470 million, compared to $901 million a year earlier. Adjusted EPS was $1.08, which is lower than analysts' estimate of $1.19.The number of subscribers streaming Disney+ reached 137.7 million, which is 7.9 million more than last quarter. The total number of users together with Disney+, ESPN and Hula is 205 million. The company confirmed plans to increase subscribers of the Disney+ service from 230 to 260 million and achieve profitability of the segment by September 2024.Walt Disney shares on May 12 at the NYSE premarket fall by 5.14%, to $99.8 per share. 
The market the day beforeThe main American stock indexes ended the trading session on May 11 in the red zone. The S&P 500 dropped by 1.65% to 3,935 points, the Nasdaq lost 3.18%, the Dow Jones adjusted by 1.02%. The energy sector (+1.34%) and utility providers (+0.72%) looked better than the market. Among the outsiders were manufacturers of discretionary goods (-3.58%) and the IT sector (-3.16%).Company newsThe quarterly results of Electronic Arts Inc. (EA: +7.97%) were slightly below consensus forecasts, but management presented a positive guidance for the current fiscal year. The company announced the termination of a long-term partnership with FIFA and the rebranding of its own football simulator.Walt Disney (DIS: -2.29%) did not meet expectations in terms of revenue and profit, although both key areas of the issuer's business (media services and theme parks) showed strong growth in operating profit, and the number of new subscribers of Disney+ streaming exceeded analysts' forecasts.Toyota Motor (TM: -5.64%) reported for the first quarter better than the preliminary estimates of experts. However, despite stable annual sales, management forecasts a 20% decrease in operating profit this year due to rising logistics and raw materials costs.We expectBy the end of April, annual consumer inflation in the United States slowed from 8.5% to 8.3%, but the indicator exceeded economists' expectations. The growth of the base CPI also turned out to be higher than the value predicted by experts, amounting to 6.2%, due to the increase in air ticket prices on the eve of the tourist season and the rise in fuel prices. Nevertheless, there is already a gradual stabilization of supplies due to the unloading of ports. The April inflation data at the moment increased investors' concern about a possible tightening of the Fed's rhetoric and provoked renewed speculation about an increase in the discount rate by 75 basis points (bp), as the regulator is forced to resist persistently high inflation.However, these fears were not justified: even the most determined member of the FOMC, the president of the St. Louis Fed, James Bullard, said on May 11 that, despite high inflation in April, a half-percent rate hike at least at the next two meetings is the main guideline and a broader change is not required. At the same time, the official still adheres to the thesis that it is preferable to raise the rate to 3.5% by the end of the year. The head of the Atlanta Fed, Rafael Bostic, also supports expanding the target range of the rate, but to a neutral 2-2.5%, noting that at the moment there is a surplus of funds in the amount of about $ 1-2 trillion on the Fed's balance sheet. After the comments of the representatives of the Federal Reserve, investors weakened expectations about the strengthening of the "hawkish" rhetoric of the regulator: apparently, officials were able to convince the market that the regulator intends to maintain the current rate of change in the base rate by 50 bp. According to the dynamics of futures, the probability of such a development is 97%.The stock exchanges of the Asia-Pacific region closed the trading session on May 12 with a drop in the main indices. Japan's Nikkei adjusted by 1.77%, China's CSI 300 lost 0.44%, Hong Kong's Hang Seng dropped by 2.24%. EuroStoxx 50 has been losing 2.59% since the opening of trading.The price of Brent crude oil futures rose to $107.5 per barrel. Gold is trading at $1853 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 3900-3980 points.MacrostatisticsThe US producer price index for April will be published today. The consensus forecast assumes that the rate of industrial inflation will slow down to 0.5% mom and 10.7% YoY after 1.4% mom and 11.2% YoY by the end of March.Sentiment IndexThe sentiment index dropped 2 points to 34.Technical pictureAt the beginning of trading on May 11, the S&P 500 attempted to grow by almost 1%, but failed to gain a foothold above the psychologically significant 4,000 points. Taking into account the technical oversold stocks, a short-term rebound is possible, but the RSI and MACD confirm the continuation of the "bearish" trend. In the context of a gradual tightening of global financial conditions, the medium-term trend of market movement remains downward. The closest support is the level of 3850-3900 points. 
Streaming service Spotify (SPOT), which allows you to legally listen to music, audiobooks and podcasts without downloading, has published a financial report for the 1st quarter of 2022:revenue was forecast at €2.62 billion, but actually amounted to €2.66 billion: 24% more than in the first quarter of last year;advertising revenue increased by 31% and reached €282 million;profit of €0.21 per share, despite the fact that the forecast was negative: -€0.25;the average revenue per user within the premium subscription increased by 6% and amounted to €4.38, this is due to the increase in prices last year, as well as the expansion of the range of the site;the number of paid Spotify subscribers increased by 15% compared to the same period in 2021: up to 183 million people.The reaction to the good financial report was not long in coming - the shares soared by 6.2% during the trading session, from €96.8 to €102.77.At the same time, Spotify has big plans: in the second quarter, it plans to earn €2.8 billion and increase the audience of paid subscribers to 187 million people.Spotify's departure from Russia almost didn't noticeDue to difficult geopolitical conditions, Spotify has completely shut down services in Russia since April 11. However, 1.5 million paid subscribers were lost even before the complete shutdown: in March, the subscription could not be renewed, although it was still possible to use it. In April, most likely, the company lost up to 600 thousand more users.Officially, Spotify started working in Russia relatively recently - in the summer of 2020. Thus, the service did not last in the Russian Federation for two years, and the loss of the Russian market certainly will not be a serious blow to the company. 
Electric car manufacturer Tesla has suspended most of the production at its Shanghai plant indefinitely due to delays in the supply of spare parts. Last week, Tesla planned to increase production to the level preceding the lockdown. The plant was producing about 1,200 cars a day and hoped to increase the pace to 2,600 cars a day from May 16.At the Shanghai gigafactory, Tesla produces Model 3 electric cars and Modeli crossovers, which are subsequently supplied both to the domestic Chinese market and for export. At the end of March, production was suspended for almost a month due to epidemiological restrictions.Tesla shares on Nasdaq on May 10 rose by 1.64% to $800.04 per share. The premarket continues to grow. 