GBP/USD: Pound strengthens amid British GDP growthThe British pound continues to strengthen in the GBP/USD pair, correcting the downward trend that has dominated since mid-January. At the beginning of the week, quotes reached the level of 1.2451 (Murray [4/8]), which was due to the statement by US President Donald Trump on the introduction of 25.0% tariffs on steel and aluminum imports. However, further growth is being held back by expectations of a prolonged period of high interest rates from the US Federal Reserve System.Contradictory comments by Fed Chairman Jerome Powell exerted additional pressure on the dollar. In his speech to Congress, he noted the stability of the economy and the labor market, as well as a steady slowdown in inflation, which allowed officials not to rush to lower rates. However, data on the consumer price index released on Tuesday showed an increase in inflation from 2.9% to 3.0% year—on-year, and the base rate from 3.2% to 3.3%. In response, Powell was forced to adjust his position, admitting that the targets had not yet been reached, and that the regulator would probably have to keep rates at the current level for longer. This has led to a revision of market expectations: investors now assume that the first reduction in borrowing costs will take place not in June, but closer to the end of the year.The pound was supported by unexpectedly strong UK GDP data for the fourth quarter. The country's economy grew by 0.1% in quarterly terms, despite the projected decline by the same level, and year-on-year the indicator reached 1.4%, exceeding expectations of 1.1%. This factor reduces the likelihood of aggressive monetary policy easing by the Bank of England in the coming months, which supports the position of the British currency.Resistance levels: 1.2512, 1.2695, 1.2817.Support levels: 1.2390, 1.2207, 1.2085.USD/JPY: US deficit reaches $128.64 billionThe US dollar is showing mixed dynamics in the USD/JPY pair, holding near the 154.35 mark during the Asian session. Quotes are testing the resistance level for an upward breakdown, while the US currency remains supported by strong inflation data for January, published the day before.The report on the consumer price index recorded an increase from 2.9% to 3.0% in annual terms, and the base indicator rose from 3.2% to 3.3%, while analysts predicted that the indicator would remain at the same level and slow down to 3.1%. These data confirm the statement by the head of the US Federal Reserve, Jerome Powell, that the regulator does not yet see any reason for accelerated monetary policy easing, especially against the background of inflationary pressure risks due to the protectionist course of the White House. In addition, the US budget deficit increased from $87.0 billion to $128.64 billion, which is almost six times higher than in January 2023. Experts attribute this growth to increased government spending on healthcare, social security, and debt interest payments. Today, market participants will focus on statistics on industrial inflation: the base index is expected to slow down from 3.5% to 3.3% year—on-year, and in monthly terms, an increase from 0.0% to 0.3%.Meanwhile, the head of the Bank of Japan, Kazuo Ueda, stressed that the regulator takes into account the likelihood of prolonged high prices for food and other essential goods, which may affect the inflation expectations of the population. In January, the Bank of Japan raised its key interest rate to 0.50%, the highest level in 17 years, declaring its intention to achieve stable price growth supported by steady wage increases. In addition, Kazuo Ueda confirmed that a review of the government bond purchase program will be presented in the summer: earlier, the Bank of Japan announced plans to reduce their volume to 3.0 trillion yen from January to March 2026.Resistance levels: 154.50, 155.00, 155.50, 156.00.Support levels: 153.70, 153.27, 152.53, 151.50.Gold market analysisGold is showing moderate growth, once again approaching historical highs above $ 2,900 per ounce: at the moment, XAU/USD is testing the level of 2920.0, while traders are awaiting the publication of fresh data on US manufacturing inflation and weekly statistics on applications for unemployment benefits. According to forecasts, the number of initial applications on February 7 may decrease from 219.0 thousand to 215.0 thousand, and repeat applications from 1.886 million to 1.88 million (for the week of January 31). In addition, experts predict a decrease in the basic producer index (excluding food and energy) from 3.5% to 3.3% year—on-year, and a monthly increase from 0.0% to 0.3%.Meanwhile, according to RBC, by January 1, 2025, the remaining precious metals and stones in Russian accounts amounted to 325.4 billion rubles, which is equivalent to 38.1 tons of gold — half as much as in the fall of 2023, when a three-year maximum was recorded. According to the Central Bank of the Russian Federation, last year, reserves of precious metals in monetary terms decreased by 23.6%, while physical reserves of gold fell by 46.4%, losing more than 33 tons. This is the largest reduction since 2020, when, amid the COVID-19 pandemic, stocks decreased by 34.5 tons.Resistance levels: 2920.00, 2942.65, 2965.00, 2980.00.Support levels: 2900.00, 2875.00, 2858.06, 2845.00.Crude Oil market analysisThe price of Brent Crude Oil remains in the local sideways range after the publication of the OPEC+ report, holding above $ 74.0 per barrel during Asian trading.According to the report, in January, the participating countries increased production by 13 thousand barrels per day, however, taking into account voluntary restrictions, the actual volume turned out to be 251 thousand barrels per day below the established limit. With the allowed daily limit of 35.427 million barrels, real production amounted to 35.176 million, which looks positive against the background of regular quota exceedances last year. According to OPEC+ forecasts, global oil demand in 2025 and 2026 will grow by 1.4 million barrels per day, reaching 105.2 million and 106.63 million barrels, respectively. The main consumers are China, India, other Asian countries, as well as countries in the Middle East and Latin America. The forecast for production in the United States was revised down by 50,000 barrels per day, and now the estimated level is 13.47 million barrels per day, which is lower than preliminary estimates made after President Donald Trump's statements about the expansion of offshore production along the American coast.Additional pressure on Brent oil is exerted by data on reserves. According to the American Petroleum Institute (API), their volume increased by 9.043 million barrels after a previous increase of 5.025 million barrels. According to a report from the U.S. Energy Information Administration (EIA), oil reserves also continued to grow, adding 4.070 million barrels after a jump of 8.664 million barrels earlier.Support levels: 72.91, 69.83.Resistance levels: 79.22, ...
EUR/USD: bulls get a chance to update local peaksDuring Asian trading, the European currency remains near the 1.0489 mark, correcting after the recent update of local highs on January 27. The market is showing restrained dynamics, as at the moment there are no important macroeconomic factors that can set the direction of movement. Investors focused on the possible resumption of tariff restrictions, which US President Donald Trump announced at the beginning of the month.Starting on March 4, 25% duties on imports of goods from Canada and Mexico, which were previously postponed for a month as part of preliminary agreements, will come into force. At the same time, the introduction of similar measures against EU products is not excluded, as Trump has repeatedly accused Brussels of unfair trade policy towards the United States. Experts believe that pressure on the European Union may increase in the framework of negotiations on the settlement of the Russian-Ukrainian conflict, given the resistance of individual countries in the region. In addition, the US president has repeatedly expressed interest in acquiring Greenland, which also causes controversy in international relations.The market's focus remains on the comments of European officials, which may give signals about the future monetary policy of the ECB. Pierre Wunsch, a member of the regulator's governing council and head of the National Bank of Belgium, called for a cautious approach to adjusting interest rates in order to avoid the risk of an excessive decline in the indicator. In turn, Joachim Nagel, President of the German Federal Bank, noted that price dynamics allow us to expect the target inflation rate to be reached this year. In this regard, market participants predict that the ECB will cut interest rates for the fifth consecutive time at the next meeting, as inflation, which exceeded double digits after the events of 2022, has now stabilized just above 2.0%. Additionally, traders drew attention to the final German GDP data for the fourth quarter of 2024: the country's economy shrank by -0.2% in quarterly terms and by -0.4% year-on-year, which coincided with analysts' forecasts.Resistance levels: 1.0500, 1.0550, 1.0600, 1.0654.Support levels: 1.0450, 1.0400, 1.0342, 1.0300.GBP/USD: the market expects a rate cut of 75 bp during the yearThe GBP/USD pair shows a downward trend during the morning trading session, returning to a corrective decline. The exchange rate is testing support at 1.2640, while traders expect new factors to appear that could affect further movement. Market participants continue to analyze the macroeconomic statistics for last Friday, assessing its impact on the prospects of the British currency.The January retail sales data in the UK turned out to be higher than expected, which supported the strengthening of the pound. On a monthly basis, the index rose by 1.7% after falling by -0.6% in December, although only 0.3% growth was forecast. On an annualized basis, sales slowed from 2.8% to 1.0%, but exceeded the projected 0.6%. Excluding fuel, growth was 2.1% month-on-month and 1.2% year-on-year, which was also higher than expected at 0.9% and 0.5%, respectively. However, business activity showed mixed results: the S&P Global index in the industrial sector in February fell from 48.3 to 46.4 points against forecasts of 48.4 points, while in the service sector the indicator strengthened from 50.9 to 51.1 points, exceeding preliminary estimates of 50.8 points.The issue of the rate of interest rate reduction by the Bank of England remains in the spotlight, as stated by the representative of the Monetary Policy Committee, Swati Dhingra. During her speech at Birkbeck, she noted that a gradual reduction in the cost of borrowing does not necessarily mean a standard reduction of 25 basis points. At the same time, according to a survey of leading economists conducted by Reuters, most experts predict that the British regulator will continue to ease monetary policy, reducing the rate by 75 basis points during the year.Resistance levels: 1.2650, 1.2690, 1.2747, 1.2800.Support levels: 1.2600, 1.2550, 1.2500, 1.2450.NZD/USD: the pair is preparing for continued growth after a pullbackDuring the Asian session, the NZD/USD pair fell back to around 0.5710 after steadily rising 3.5% in January and February. Despite the correction, the overall macroeconomic background remains favorable for the continuation of the upward movement. According to published statistics, the core retail sales index in New Zealand for the fourth quarter increased by 1.4% on a quarterly basis, which significantly exceeded the forecast of 0.2%. The previous data was revised upward from -0.8% to -0.6%, and total sales for the same period increased from 0.0% to 0.9%, exceeding analysts' expectations of 0.5%.Additional support for the national currency is provided by the prospect of further easing of the monetary policy of the Reserve Bank of New Zealand. The regulator has already lowered the rate by 50 basis points, bringing it to 3.75%, and, according to the head of the department, Adrian Orr, it is likely to reach 3.00% by the end of the year. This means that at least two more stages of decline are possible in the coming months. However, the current weakening of the New Zealand dollar is due to the strengthening of the US currency, which was the market's reaction to statements by US President Donald Trump about the introduction of new duties on copper imports. These measures contribute to the growth of demand for the dollar, putting additional pressure on the NZD/USD.Resistance levels: 0.5795, 0.5928.Support levels: 0.5690, 0.5600.WTI oil market analysisWTI crude oil prices show a multidirectional movement during the morning trading session, consolidating around 69.00 and remaining at the lowest values since December 23, updated the day before. Expectations of a possible diplomatic resolution of the Russian-Ukrainian conflict are putting pressure on the market, which reduces demand for defensive assets, including commodities. The administration of US President Donald Trump is actively promoting initiatives to end hostilities, while simultaneously taking steps to restore diplomatic ties with Russia. The first meetings of the delegations have already taken place in Saudi Arabia, and experts believe that if agreements are reached, a partial revision of the sanctions policy is possible, including easing restrictions on Russian energy exports via sea routes and pipeline systems.Additional pressure on oil is exerted by the resumption of exports of raw materials from Iraqi Kurdistan. On Monday, Iraqi Deputy Prime Minister Hayyan Abdul Ghani announced that supplies would resume after the final approval of technical details with Ankara. According to experts, transportation volumes will amount to about 185.0 thousand barrels per day, which may increase pressure on the market and limit the growth potential of oil prices.Resistance levels: 69.00, 70.00, 71.00, 71.62.Support levels: 68.30, 67.00, 66.00, ...
USD/CHF: quarterly employment in Switzerland in the spotlightThe USD/CHF pair is in the correction phase, trading around 0.8969, with the potential for further decline amid strong macroeconomic data from Switzerland.A stable labor market remains one of the key factors supporting the franc. In the fourth quarter, employment in the non-agricultural sector increased by 0.9%, equivalent to 48.3 thousand new jobs. At the same time, the number of open vacancies decreased by 17.1% year-on-year, which indicates a high level of job occupancy. The share of companies planning to expand their staff was 11.7%, while only 4.7% of employers intend to reduce staff. This stability in the labor market provides the Swiss National Bank with additional arguments in favor of further lowering the interest rate, which is likely to reach 0.00% by the end of the year.Resistance levels: 0.9000, 0.9120.Support levels: 0.8940, 0.8810.AUD/USD: the exchange rate moved to correction before the inflation reportThe Australian dollar is showing moderate growth in the AUD/USD pair during the Asian session, correcting the previous two-day decline. After a pullback from local highs on December 12, the exchange rate is testing the 0.6350 level, trying to gain a foothold higher, while traders expect new factors that can affect the dynamics. Meanwhile, the sale of shares of leading Australian banks has stopped after eight sessions of decline caused by the first decrease in interest rates since November 2020 and an increase in overdue debt. In particular, the capitalization of the Commonwealth Bank of Australia has decreased by about 25 billion Australian dollars during this time. The key event for the market will be the publication of January inflation data in Australia, which is scheduled for tomorrow at 02:30 (GMT+2). According to forecasts, the annual consumer price index may rise from 2.5% to 2.6%, which may support the national currency. Investors' attention will also be focused on statistics on completed construction: the indicator for the fourth quarter of 2024 is expected to slow down from 1.6% to 1.0%.The final report on US GDP for the fourth quarter of 2024 will be released on the US market on Thursday at 15:30 (GMT+2), and experts do not predict a revision of the value from 2.3%. On the same day, data on applications for unemployment benefits and January orders for durable goods are expected to be published, which may grow by 2.5% after a December decline of -2.2%. On Friday at 15:30 (GMT+2), market participants will assess the key inflation indicator for the US Federal Reserve — the price index of personal consumption expenditures. Analysts expect a slowdown in the base indicator from 2.8% to 2.6% year-on-year, while monthly growth may accelerate from 0.2% to 0.3%. The overall index is also expected to reach 2.5%, adding 0.3% over the month.Resistance levels: 0.6373, 0.6408, 0.6450, 0.6478.Support levels: 0.6330, 0.6300, 0.6274, 0.6250.Gold market analysisDuring the Asian trading session, gold is showing a decline, rolling back from historical highs recorded the day before and testing support at 2935.75. Pressure on gold is exerted by a decrease in geopolitical tensions associated with the likely progress of peace talks on the Russian-Ukrainian conflict. The weakening demand for protective assets contributes to the reorientation of investors to riskier instruments, which further limits the metal's growth potential.Market participants' attention is also focused on the latest economic data from the United States. According to the S&P Global report, the business activity index in the manufacturing sector rose from 51.2 to 51.6 points in February, exceeding the projected 51.5 points, while the services sector saw a sharp decline from 52.9 to 49.7 points, which turned out to be worse than the expected 53.0 points. Additional pressure on the dollar was exerted by a decrease in the University of Michigan consumer confidence index in January from 67.8 to 64.7 points, despite neutral forecasts. Also, data on the Chicago Federal Reserve's national activity index was released yesterday, which fell from 0.18 to -0.03 points in January, reflecting a weakening in economic activity. The December housing price index from S&P/Case-Shiller will be published today at 16:00 (GMT+2), and at 17:00 (GMT+2) and 17:30 (GMT+2), markets expect the publication of business activity indices in the manufacturing sector from the Federal Reserve Bank of Richmond and the Federal Reserve Bank of Dallas. which can set the further direction of the dollar's movement and, accordingly, affect the dynamics of gold.Resistance levels: 2956.19, 2980.00, 3000.00, 3025.00.Support levels: 2920.00, 2900.00, 2875.00, 2858.06.Crude Oil market analysisThe price of Brent crude oil remains under pressure, correcting in a downward movement and trading just below the 75.00 mark. The market is influenced by two factors at once: the trade policy of US President Donald Trump, which implies possible changes in import duties, as well as the prospects for an increase in oil supplies from Iraq. These circumstances increase uncertainty and create negative expectations among investors.Iraqi Oil Minister Hayan Abdel Ghani announced that the transportation of raw materials from Kurdistan to Turkey will resume next week. The cost of the supplied oil will be $ 16.0 per barrel, and the state-owned SOMO company will handle its sale. According to preliminary estimates, the volume of supplies in the first months will range from 300.0 to 500.0 thousand barrels per day, which may increase pressure on the market.Additional attention of traders is focused on the report of the American Petroleum Institute (API) on fuel reserves, which will be released today at 23:30 (GMT+2). Experts predict that after the previous increase of 3.339 million barrels, the figure will change slightly. Tomorrow at 17:00 (GMT+2), data from the Energy Information Administration (EIA) will be published, and if they confirm the positive dynamics of last week, when stocks increased by 4,633 million barrels, this may strengthen the current trend in the market.Resistance levels: 75.30, 78.00.Support levels: 73.70, ...
AUD/USD: forecasts point to RBA policy easingThe Australian dollar continues to strengthen in the AUD/USD pair, updating the local highs of mid-December 2024 and developing a short-term upward momentum. During the Asian session, the instrument is testing the 0.6370 level, receiving support from both technical factors and expectations of a potential peaceful settlement of the Russian-Ukrainian conflict, which could have a positive impact on global markets and energy prices.Reports from Australia's largest financial institutions provide an additional positive background. For example, the Commonwealth Bank of Australia reported a 2.0% increase in half-year profit to $5.13 billion, exceeding analysts' forecasts. In addition, dividend payments per share increased by 5.0%, and the bank's quotes reached a historic peak, which supported the ASX 200 index.Investors' attention remains focused on labor market data, which will be published on Thursday: experts expect employment growth to slow from 56.3 thousand to 20.0 thousand, and unemployment may rise to 4.1%. Also on Wednesday, statistics on wage dynamics for the fourth quarter will be released, where an annual decline from 3.5% to 3.2% is forecast.Resistance levels: 0.6373, 0.6420, 0.6455, 0.6478.Support levels: 0.6330, 0.6300, 0.6274, 0.6250.NZD/USD: medium-term dynamics shifted in favor of the bullsThe NZD/USD pair is trading above 0.5738, breaking the resistance level of 0.5691, which may signal a change in the long-term trend.Positive macroeconomic statistics from New Zealand contributed to the growth of quotations. Business inflation expectations in the first quarter were 2.06%, exceeding the forecast of 1.80%, and the food price index rose to 2.3% year-on-year, which increases the likelihood that the Reserve Bank of New Zealand will keep the rate at 4.25% on February 19. At the same time, investors expect a decrease to 3.75%, which may increase pressure on the national currency exchange rate. At the same time, business activity in January showed steady growth: the index in the manufacturing sector rose to 51.4 points from 45.9, and in the service sector – to 50.4 points.Last week, the US dollar weakened by 1.57% in USDX as investors shifted their focus to risky assets amid geopolitical stabilization. Peace talks between the United States, Russia and Ukraine are expected to take place in Saudi Arabia in the spring. The decrease in tensions in the Gaza Strip is also contributing to a decrease in interest in the dollar as a safe haven asset. If the global situation continues to normalize, it will strengthen the growth of the NZD/USD.Resistance levels: 0.5795, 0.5928.Support levels: 0.5690, 0.5600.USD/CAD: bearish momentum is gaining strengthThe USD/CAD pair remains under pressure during the morning session, developing the downward trend established last week. Quotes are testing the 1.4170 level for a downward breakdown, updating the minimum values since mid-December.The market continues to react to the 25.0% tariffs imposed by US President Donald Trump on steel and aluminum imports, of which Canada is the main supplier. Additional pressure on the economy is exerted by the recently signed memorandum on mutual trade restrictions, which increases investor concerns. Conservative Party leader Pierre Pouillevre expressed concern about the current state of the country's economy at a rally on February 15, stressing that after the pandemic stagnation, Canada is facing new challenges that threaten business and income levels.Traders' attention is focused on the upcoming Canadian inflation report, which will be published on Tuesday at 15:30 (GMT+2). Analysts predict that the consumer price index on a monthly basis will remain unchanged after a decrease of 0.4% earlier, and the base indicator will be fixed at the levels of -0.3% for the month and 1.8% in annual terms.Resistance levels: 1.4200, 1.4250, 1.4300, 1.4350.Support levels: 1.4145, 1.4100, 1.4050, 1.4000.Oil market analysisWTI Crude Oil prices remain under pressure, showing a moderate decline in morning trading. Quotes are testing the level of 70.70 for a downward breakdown, holding near the lows of December 30, updated earlier. Traders are being cautious, waiting for new factors to appear that could affect the direction of market movement.The main pressure on oil prices is exerted by uncertainty in the trade policy of US President Donald Trump. Earlier, the White House imposed 25.0% tariffs on imports of goods from Canada and Mexico, and also imposed similar duties on imports of steel and aluminum from all countries. Chinese products are taxed at 10.0%. Additionally, the possibility of a significant reduction in Iranian oil exports and the introduction of new restrictions on supplies from Russia is being considered, which may be related to the process of peaceful settlement of the conflict in Ukraine.The corrective dynamics continues in the market. According to the latest report from the U.S. Commodity Futures Trading Commission (CFTC), net speculative positions on WTI Crude Oil decreased from 230.3 thousand to 220.0 thousand last week. There is a decrease in the activity of sellers: the balance of producers amounted to 446,121 thousand for the bulls against 382,201 thousand for the bears. During the week, buyers reduced their positions by 3,091 thousand contracts, and sellers – by 12,058 thousand, which indicates a weakening of selling pressure, but does not exclude further volatility.Resistance levels: 71.00, 71.62, 72.15, 73.00.Support levels: 70.00, 69.00, 68.30, ...
OPEC+ is markedly reducing oil production - in fact, the exporting countries will pump about 1 million barrels less per day. We have written earlier on why this is so.As a result, supply at the market has become lower, so prices have gone up and are approaching $100 per barrel again.What will the U.S. do after the OPEC+ statement?The coming energy crisis and the high inflation it causes are scaring the whole world, but it's the States that are worried the most right now:expensive oil means expensive fuel;it's causing prices of almost all commodities to rise;inflation is going up - the Fed keeps tightening policy;high key interest rates are pushing the U.S. closer to recession;in addition, high fuel prices can cause social discontent.To prevent this, the U.S. is trying to influence the largest oil producers and keep prices down. Otherwise, the Democrats will most likely not win the congressional elections. They are due in a month.The U.S. started to prepare in advance: President Biden flew to Saudi Arabia this summer and persuaded the U.S. to bring down oil prices. But it did not work out very well: OPEC acts in its own way and does not want to listen to Americans. As a result, the failed negotiations with the Saudis have further diminished the credibility of Biden and the Democrats' ability to influence oil, inflation and economic stability in the United States.However, the Biden administration is not giving up; they have a few more options - rather radical ones - on how to lower oil prices.Additional Oil ReleaseThe safest, though least effective, option is to further draw oil from strategic U.S. storage facilities. In response to OPEC+'s decision to cut production, Biden announced that the U.S. would release 10 million barrels of oil, even as storage reserves are depleted.That would be all well and good, but the announcement had little or no effect on oil prices, especially compared to the previous similar decision to release 180 million barrels to the market. No wonder: the volumes are not comparable.In addition, since U.S. storage reserves are running out, there is a risk that they will not be enough for a rainy day: in case of sharp reductions in domestic production (for example, during hurricanes in the Gulf of Mexico) or imports (if OPEC+ countries reduce exports).Reducing military aid to the ArabsDemocrats have drafted a "Tense Partnership" bill in response to OPEC+ and specifically the alliance's leaders, Saudi Arabia and the UAE. They are accused of "a hostile act against the United States" and "siding with Russia in the conflict with Ukraine."As revenge, the U.S. could withdraw its troops from these countries and stop supplying weapons and other military aid to fight neighboring states and terrorists. This includes protecting oil infrastructure from attack.This option also has disadvantages: without U.S. military support in these countries, there could be problems that would inevitably affect the global oil supply. After all, if military actions or terrorist attacks affect the oil fields or storage facilities of Saudi Aramco, oil will cost even more, and such attacks occur quite often.So even if the Saudis and the UAE will not reduce exports in response to the withdrawal of troops and reduction of arms supply, there is a good chance that sooner or later the fighting will make prices go up.In addition, Saudi Arabia has already planned to prepare for a possible conflict with the United States. For example, in the spring the Saudis said they were going to explore ways to move away from the petrodollar - that is, not to use bucks in the black gold trade. In this case, the demand for the dollar could fall dramatically, especially if other oil-exporting countries do the same.NOPEC: Conflict with OPEC+Amid disagreements with OPEC, the U.S. may return to the "oil production and export cartel law," NOPEC, to have more leverage on oil exporters.In this case, U.S. courts will be able to consider antitrust suits against OPEC+ and in general against countries involved in cartel collusion in the oil market. Under the decision of their own courts, the U.S. will be able to impose sanctions, confiscate property of these countries and put pressure on them in other ways. At the same time, the U.S. itself will indicate what is legal and what is not, thus assessing any actions of the countries that regulate oil production and prices.This option also has a disadvantage: sanctions on exporters would also hit the U.S. itself. If oil prices become lower, the U.S. oil industry will also be hard hit: domestic production will decrease and it will have to import more. And since the market is competitive, and the U.S. in this case will be "enemies of OPEC +", they will have to buy oil more expensive.So, even if the U.S. takes a drastic step - provoking a conflict with Saudi Arabia or the UAE, or starting a sanctions war with OPEC+ - all this will have a negative impact on themselves.Can't sanctions be lifted on Venezuela?As we can see, the U.S. has almost no normal options left to influence the oil market. Nevertheless, the U.S. says it is not going to remove sanctions from Venezuela yet, despite the fact that this would help get more oil on the market and lower oil prices. We may see some new rhetoric in this regard, but no change for now.The Iran deal has also been stalled so far: there is no news or movement on it. Although it is possible that disagreements with the Saudis may attract the U.S. to support Iran, because these are the two sides of the Arab conflict.On the one hand, Iranian oil would help to increase supply, but there is a nuance here as well: the reserves in this country are not grandiose, moreover, most of the oil is already exported in circumvention of sanctions.So what to do with Brent and WTI crude oil prices in 2022?If we discard all of the above options, then all we have to do is sit back and watch oil go up in price. The outlook is also bad: even if the world starts a recession and the demand for oil decreases, OPEC+ is already reducing production and adjusting to negative expectations, and also the supply from Russia may decrease if the embargo comes into force.And if that's the case, U.S. inflation will be high. And given the strong labor market, the Fed may raise the rate even more than 1.25% by the end of the year, and it is not certain that it will slow down next year as well. If rates remain high for a long time, the risk of recession in the U.S. is very high, and stocks and cryptocurrencies will have no fuel for growth. As a result, the economy will have a hard time: liquidity is scarce.If the U.S. starts to act sharply, the dollar is at risk: the "oil" countries can give it up to reduce dependence on the United States. But if the U.S. does nothing, tightening Fed policy will keep the dollar very strong - though at the cost of high inflation and recession. 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In 2019, the "sub-sanctioned" Iran began to increase oil supplies in circumvention of sanctions. Mostly tankers went to China and the Mediterranean: Syria and Turkey. And by the beginning of 2022, the fleet for transporting sanctioned Iranian and Venezuelan oil had tripled. It accounted for approximately 400 million barrels per year. And such a "ghost armada" successfully undermines the business of transport companies.Why did Iranian tankers get such a name?Last year, The Mail on Sunday reported: 123 Iranian vessels circumvent sanctions on oil trade. They change their location to GPS and create the appearance that they are anchored at sea, but at this time they are loading/unloading at the port. They also actively forge documents, use flags of different countries, disable identification systems and use front companies. Oil is often loaded onto several vessels and mixed before reaching its destination. This is also the case with "toxic" Russian oil.At the same time, Iran has a whole "underground" financial system for trade bypassing sanctions, writes the WSJ. It includes accounts in foreign banks, intermediary companies outside the country and firms that coordinate prohibited trade. The annual turnover is estimated at tens of billions of dollars.And Iranian banks attract affiliated firms to manage trade under sanctions. They register "daughters" outside the country, become trusted for Iranian traders, and then trade with foreign buyers of Iranian oil in foreign currency through accounts in foreign banks.Will the "Iranian Armada" help Russia?She is already helping her to circumvent sanctions, writes the Daily Mail. The international non-profit organization United Against Nuclear Iran (UANI) accuses the Iranian navy of cooperating with Russian oil companies. Allegedly, Russian oilmen are using "Tehran's black market vessels" to circumvent the export ban. And the US, the EU and the UK are even calling for the formation of a team of "ghostbusters".At least 5 Iranian "ghost armadas" are transporting oil from Russia to China and India, according to UANI. And recently, the WSJ reported that Zamanoil from the UAE was linking Iranian and Russian oil workers. The US Treasury accused her of working with the Russian government and Rosneft on the supply of Iranian oil to Europe.However, at the end of March, Iran denied a "secret offer from Russia" to help it circumvent sanctions in exchange for support in concluding a nuclear deal. And in May, he noted that he could not be a competitor of Russia in the global oil and gas market. The country has its own regular customers, and Iran sells the maximum amount of oil.So officially, Iran does not seem to be planning to use its "army of ghosts" to help for the benefit of Russia, despite the fact that these countries have "converged" before. But then there was no question of an embargo on Russian oil and there was no ban on ship insurance. In the new reality, the actions of the "ghost armada" are quite difficult to ...
The year 2022 on world markets will largely be determined by the tightening of monetary policy in the United States, and the first week of the new year confirmed this. The minutes of the Fed's December meeting published last week showed a significant tightening of the position of the regulator's representatives – Fed members believe that the rate can be raised as early as March, and also see a faster reduction in the balance sheet as appropriate. Representatives of the regulator believe that the current economic conditions are already in many ways conducive to tightening the labor market, some even noted the recovery of the labor market already sufficient for such actions, although the majority still expects further improvement in the labor situation. Against this background, it is worth noting the publication of December labor data in the United States, which came out ambiguous. On the one hand, employment in December increased by only 200 thousand. The Bloomberg consensus forecast assumed an employment growth of 450 thousand, and the actual growth rate of the indicator was the lowest since the beginning of 2021. Nevertheless, in many respects such weak employment growth is explained by seasonal adjustment, and the unemployment rate in December fell more than expected. Thus, the indicator has updated the next lows since the beginning of the pandemic, dropping to 3.90% against the expected 4.10%. The unemployment rate continues to approach a historic low of 3.40%, and labor statistics have further increased fears in the market of an imminent tightening of the PREP in the United States. As a result, on Friday, the yields of ten-year US treasuries at the moment exceeded 1.80% per annum - the maximum since the beginning of the pandemic. Today they have returned to these levels again.This week, the dynamics in the market will continue to be determined by expectations for the actions of regulators - investors will follow the statements of representatives of the Fed and the ECB, as well as the publication of price data in the United States for December. Statistics published last week showed an increase in inflation in the EU to 5.00% YoY. As a result, the topics of price growth in December updated the historical maximum, while analysts expected a slight slowdown in price growth. The situation on the supply side also has high inflation in the United States. The December business activity indices indicated a slight easing of logistical problems, however, the further deterioration of the epidemiological situation again intensified disruptions in logistics chains, which does not lead to a significant slowdown in price growth. The FAO World Food Price index fell in December for the first time since July, but food inflation remains at elevated levels. Against this background, US inflation data is likely to continue to bring the Fed rate hike closer, intensifying the negative in the markets.The main event for the oil market in early 2022 was the OPEC+ meeting. However, as expected, it was decided to stick to the current plan to increase production. Nevertheless, the cartel lowered its forecasts for a surplus in the oil market, which allowed Brent crude futures to exceed the level of $80/bbl. Moreover, against the background of interruptions in the supply of black gold from Kazakhstan and Libya, quotations were close to $83/bbl. However, at the end of the week they declined from these levels, today Brent futures are growing by 0.35% and are trading around $82.05/bbl. The main negative for oil this week may be related to the potential strengthening of the dollar amid expectations of a tightening of the PREP in the United States. However, in the absence of a significant strengthening of the dollar, Brent futures may still exceed the levels of $83/bbl– - the quotes may be supported by another weekly decline in oil ...
Oil is getting more expensive on Friday morning. By 8.25 GMT, the price of a barrel of Brent oil rose to 70 dollars 89 cents, or 1.75%. The price of a barrel of WTI oil rose to 67 dollars 71 cents or 1.22%. According to the results of trading on Thursday, these oil standards rose by 1.2% and 1.4%, respectively. Investors evaluate the results of the last meeting of the countries participating in the OPEC+ agreement. Some market participants expected that the alliance would decide to reduce the volume of oil production. However, OPEC+ retained the current parameters of the deal. This means that the alliance will continue to increase the volume of raw material production by 400,000 b/s every month. At the same time, the participants of the meeting stated that they could make a different decision on the volume of production at any time. Everything will depend on the situation on the oil market and in the global economy. They noted the persistence of uncertainty. It intensified after the appearance of the next coronavirus strain omicron. Investors liked the alliance's statement about the possible holding of an extraordinary meeting, if the situation requires ...