In the last month of summer, the oil exchange rate is likely to show a correctionIn August, the oil price depends on several important factors - first of all, the recovery of the market in the United States and the new flare-up of the conflict in the Middle East. The Israeli authorities have accused Iran of attacking an oil tanker, and the United States and Great Britain have already promised support to Israel. Against this background, the oil exchange rate moved to growth after a short correction, but it is not known how long this recovery growth will be. We offer a traditional analysis of oil prices.Reducing unemployment in the United StatesIn many ways, the positive movement on the US stock markets has a positive effect on the oil exchange rate: the S&P 500 and NASDAQ 100 indices traditionally update historical highs. According to data from the US Department of Labor, the number of applications for unemployment benefits has fallen sharply.During the last week of July, only 385 thousand such appeals were registered, and the total number of recipients of benefits amounted to 3 million people. However, the effect of positive news from the US markets has already been played out, and the dynamics of the oil exchange rate will need new incentives to continue growth.At the same time, macroeconomic statistics from the United States show an increase in the commodity deficit, which increased from $71 billion in May to $75.7 billion in June. This was largely due to a 2.1% increase in imports compared to the previous month, although exports increased by only 0.6%. This is largely due to a reduction in supplies, which in turn restricts production within the United States.There are already reports about how the spread of a new strain of coronavirus can affect the American economy. In particular, as the president of the Federal Reserve Bank of Minneapolis, Neil Kashkari, said, the new strain may slow down the recovery of the labor market. This completely contradicts the recent statement by Fed Chairman Jerome Powell, who assured analysts that the delta strain is not a risk to the American economy.Positive statistics on the labor market may force the Fed to change its approach to monetary policy and increase rates, as well as curtail the quantitative easing program. First of all, this will lead to a strengthening of the dollar, which in turn will affect the commodities denominated in the US currency. In this case, the oil exchange rate will be influenced by another important negative factor. Moreover, investors will begin to withdraw resources from risky assets, and then the Russian and Chinese stock markets will suffer.Already half of the US states have stopped paying increased unemployment benefits, which on the one hand indicates that there is no need for additional incentives, and on the other hand may mean an increase in demand for fuel. However, in any case, the statistics on the labor market in the United States may not be as positive as it may seem at first glance - the number of jobs outside agriculture, on the contrary, turned out to be less than a year earlier. First of all, this was caused by a large number of dismissals in the field of higher education.Read more: The history of Federal Reserve (Fed) and its functionsThe influence of China and RussiaAn increase in oil purchases from China can potentially act as a new incentive for the hydrocarbon market. So, China may soon announce an increase in quotas for the purchase of hydrocarbons. Moreover, it is expected that more oil will be purchased not only by small refineries from China, but also by large Chinese companies.The main seller of oil on the Chinese market is the Arab countries from the Persian Gulf, so first, most likely, prices for Dubai grade oil will rise sharply, and other grades, including the benchmark Brent, will follow it. However, these expectations are contradicted by the increase in the incidence of coronavirus in China - due to lockdowns and restrictive measures, traffic on some of the most important logistics routes is reduced.Moreover, the Chinese authorities have decided to restrict air and rail travel around the country. In the Asian region, the number of infected people has been growing recently. In particular, in Thailand, even new restrictive measures did not help to stop the increase in new cases. Similarly, in Sydney, Australia, the increase in new cases has reached a historic high, and the authorities expect the situation to worsen further.In turn, Russian oil companies are trying to use the OPEC+ deal to get more favorable working conditions inside the country. In particular, they suggested that the government reduce the tax burden on the industry, which in turn will help start the development of hard-to-reach oil. To do this, they proposed to create two new groups of deposits, for which they proposed to reset the tax on mineral extraction.The first group includes areas with the volume of initial reserves of less than 65 million tons and the degree of depletion of less than 1%. The second group includes the deposits of ultra-viscous oil in the Komi Republic. Moreover, the oil companies decided to stimulate the exploration of hard-to-recover reserves. To do this, it is proposed to use a traditional set of tools - tax deductions and reduction of payments for the mineral extraction tax. However, so far the Ministry of Finance is against the initiative, which is not eager to help oil companies and does not plan to change the taxation of the industry until 2023-2024, until the end of the OPEC+ agreement.At the same time, the further deterioration of the pandemic situation in the world may become a deterrent to the growth of oil prices. Recently, in order to combat the spread of a new delta strain of coronavirus, an increasing number of countries have been strengthening restrictive measures on the mobility of the population. Investors are particularly concerned about the situation in China, where domestic air and rail traffic was limited in order to localize outbreaks of the disease, which directly affects the oil exchange rate.Oil price analysisOil futures moved into the negative zone, without reaching the goals of a short-term rebound. These levels are located near the $73.50 and $71.50 marks, which corresponds to the average Bollinger bands on the daily chart. In general, the oil exchange rate is affected by downward pressure, and analysts are increasingly inclined to believe that a correction may occur in the hydrocarbon market in the near future. The support lines are located near the previous lows - around $70.20 and $67.50, according to the technical analysis of oil prices.Read more: What are futures: types, features, advantages and risksIn the first week of August, the dynamics of the oil exchange rate showed a failure-from about $75 to $70 literally from August 2 to 5. The reason for the increase is quite banal - the growth of fuel reserves in the American market, which indicates a decrease in economic activity. According to official data, inventories increased by 3.6 million barrels, while a decrease of 3.9 million barrels was expected. Moreover, analysts are influenced by data on the spread of a new strain of coronavirus in China, the United States and Japan, as well as the associated expectations of new restrictions.The most important factor that positively affects the dynamics of the oil exchange rate remains the growth of tensions in the Middle East. The conflict between Israel on the one hand and Iran and Lebanon on the other threatens the rapid exit of hydrocarbons from the Islamic Republic to foreign markets, as well as generally increases the uncertainty of oil transportation from the Middle East. As a result, literally in one day on August 5, the oil exchange rate recovered to $71 per barrel, and the next day it was already testing the level of $72 per barrel.A new conflict in the Middle East may become a significant factor that is likely to affect the oil price in August. According to Israeli Defense Minister Beni Gantz, his country is ready to start a war against Iran because of a drone strike on an oil tanker. We are talking about the attack on the Mercer Street oil tanker.Officially, the ship belongs to Japan, sails under the flag of Liberia, but it is operated by the Israeli company Zodiac Maritime. According to Gantz, the Islamic Republic has no more than two and a half months to come close to producing nuclear weapons. In this context, the attack on an Israeli tanker becomes part of a large-scale confrontation in the region. If the tension increases, the oil exchange rate may receive additional support.In turn, Israel has already received assistance from its traditional allies - the United States and Great Britain. As British Prime Minister Boris Johnson hastened to say, " Iran must answer for the consequences." In turn, the representative of the Iranian Foreign Ministry, Saeed Khatibzadeh, said that the Islamic Republic is ready to protect its security and national interests. US Secretary of State Anthony Blinken also joined the diplomatic skirmish, saying that Tehran was undoubtedly behind the attack, and the allies would prepare a "collective response" to this attack.Thus, two multidirectional factors: the strengthening of anti-bullying measures and the growing conflict in the Middle East are pushing the trajectory of the oil exchange rate in different directions. If the first factor leads to a reduction in demand, the second one seriously reduces the supply of oil - it is the Middle East conflicts that traditionally push the cost of hydrocarbons up. According to most analysts, the combination of two multidirectional factors can cause the oil exchange rate to fluctuate in a wide range from $68 to $75 per Brent, depending on the news background.Read more: Are the minutes of the Federal Reserve meetings useful for ...
GBP/USD: the pound is consolidating in anticipation of the latest statisticsThe GBP/USD pair is showing a moderate correction, holding near the 1.3112 mark. The decline in the US currency creates additional support for the pound, while the British currency remains stable due to a number of external factors.The incoming UK macro statistics did not cause a pronounced reaction from market participants. According to Nationwide Building Society, housing prices remained unchanged month-on-month in March, despite a projected 0.2% increase and an annual rate of 3.9%. Traders are focusing on the publication of final data on business activity indices: in the services sector, the indicator is expected to rise from 51.0 to 53.2 points, and the composite index from 50.5 to 52.0 points, which may reflect a recovery in business confidence.Meanwhile, the US dollar index (USDX) continues to decline, trading near the 102.70 mark and updating the annual low below the 103.00 level. Despite the positive labor market, pressure on the dollar is increasing due to the escalation of trade policy. President Donald Trump announced the introduction of a new package of tariffs that will affect all states that have taken retaliatory measures: duties for China will amount to 34.0%, for the European Union — 20.0%, and for Japan — 24.0%. The White House is also considering the idea of a mandatory minimum trade tax of 10.0% for all partner countries. British Prime Minister Keir Starmer had previously negotiated the possible exclusion of the kingdom from this list, but on the eve he admitted that it would not be possible to avoid duties, and the country should prepare for tougher conditions. In 2024, the share of trade with the United States reached 17.0% of the total foreign economic turnover of the United Kingdom.Resistance levels: 1.3210, 1.3420.Support levels: 1.3030, 1.2760.USD/JPY: bearish signals are intensifyingThe USD/JPY pair continues to move within the framework of a downward correction, holding near the level of 147.26 against the background of weak trading activity on the yen due to increased global uncertainty.On Tuesday, Bank of Japan Governor Kazuo Ueda expressed concern about increased trade restrictions from the United States. As it became known, additional fees will be added to the existing duties on steel and aluminum imports, as a result of which the cumulative rate on Japanese products sent to the United States may reach 24.0%. Ueda stressed that this issue will be raised at the upcoming G20 summit in Washington, and it is too early to talk about the consequences for domestic consumption and investment before it is held, instructing analysts to conduct a detailed assessment and develop preventive support measures. Against the background of this rhetoric, macroeconomic indicators remained in the shadows: net purchases of foreign bonds decreased to -5.9 billion yen from -233.7 billion yen a week earlier, and foreign investments in Japanese stocks amounted to - 450.4 billion yen after -1.2 trillion yen.Resistance levels: 148.60, 152.40.Support levels: 146.50, 143.20.Silver market analysisThe XAG/USD pair is showing a steady decline in morning trading, continuing the downward movement that began at the end of the previous week, when silver prices failed to stay near the local highs of October 23. The instrument is currently trading around the 33.20 mark, while investors are carefully assessing the consequences of the latest decision by US President Donald Trump to impose large-scale retaliatory tariffs against all states that restrict access to American products on their markets.According to the White House's initiative, the base duty rate is set at 10.0%, while mirror measures will be applied in an amount proportional to restrictions from other countries. For example, according to Trump, if the European Union withholds a tax of 39.0%, the United States will impose 20.0% in response. Specific values have already been published: China — 34.0%, Taiwan — 32.0%, Switzerland — 31.0%, Great Britain — 10.0%. Additionally, 25.0% tariffs on all imported cars will come into force on April 3, and on component parts from May 3. Market participants fear that these measures could provoke a large-scale deterioration in trade relations and create serious risks for the global economy, including causing a new wave of pressure on the US dollar. It also poses potential threats to the industrial sector, especially given the high proportion of silver in production chains — about 70% of the total supply is used for industrial purposes. The main supplies come from Canada and Mexico, which have already imposed mirror duties on American goods, including silver, totaling 30.0 billion Canadian dollars.Despite the current risks, the silver market remains positive in the long term. According to the Silver Institute, global demand for the metal may reach historic highs in 2025, primarily due to the rapid growth of the solar panel and electric vehicle industries. Physical mining is also showing steady growth: in 2024, First Majestic Silver Corp. It achieved a record production volume of 10.3 million ounces at the Santa Elena field, which is 7% higher than the results of the previous year.Resistance levels: 33.42, 33.75, 34.26, 34.57.Support levels: 33.00, 32.72, 32.27, 32.00.Oil market analysisDuring trading in Asia, WTI Crude Oil prices continue to decline, developing a downward movement that began on Tuesday. Currently, quotes are trying to overcome the support level around $ 69.45 per barrel, while the US republican administration's trade strategy has a significant impact on market dynamics. Investors are reacting with concern to statements from the White House, where protectionist initiatives are intensifying that could affect global energy flows.Additional pressure on the oil market was exerted by news about the possible introduction of a new package of sanctions against Russian oil supplies. A group of American senators has proposed the establishment of ultra-high tariffs of 500% on imports from countries that continue to purchase hydrocarbons from Russia, in case Moscow, in their opinion, delays the process of reaching peace agreements on the Ukrainian conflict. For comparison, similar secondary measures in force against Venezuela involve a tax of only 25%, which underlines the potential severity of the new sanctions pressure.The decline in prices is also supported by negative statistics from the US Energy Information Administration (EIA): oil reserves for the week ended March 28 unexpectedly increased by 6.165 million barrels, despite analysts' expectations of a decrease of 2.0 million barrels. A week earlier, stocks, on the contrary, decreased by 3.341 million barrels. An additional factor of instability was the situation around Kazakhstan, which has been exceeding OPEC+ production quotas for the third month in a row. In March, production in the country reached 1.880 million barrels per day with a quota of 1.468 million. The overall growth is attributed to high production activity at the Tengiz field and stable loading by the Caspian Pipeline Consortium. In 2023, the country reached a historic record for total oil and gas condensate production of 8.95 million tons per month, equivalent to 2.17 million barrels per day. All this puts additional pressure on OPEC+'s attempts to stabilize the market.Resistance levels: 69.50, 70.00, 70.34, 71.00.Support levels: 69.00, 68.25, 67.50, ...
EUR/USD: ECB comments shift market sentimentThe single European currency is showing a steady strengthening in the EUR/USD pair at auction in Asia, offsetting the losses of the previous day, when the instrument updated the local lows recorded on March 5. The pair is currently trying to overcome resistance around 1.0780, and bidders continue to look for new catalysts for further movement amid growing geopolitical and economic tensions. One of the key factors is the harsh protectionism of the United States: the White House administration has confirmed its intention to impose 25% duties on all imports of passenger cars, as well as on the most important components - from engines to transmissions and electronic systems.Additional attention of market participants is focused on the statements of representatives of the European Central Bank. Piero Cipollone, a member of the ECB Governing Council, said that the situation is in favor of a softer monetary policy: lower energy prices, rising real yields, the strengthening of the euro and international trade tensions create reasonable conditions for a return to a rate below 2.00%. In turn, the head of the Bank of Italy, Fabio Panetta, stressed the need for a pragmatic approach, focusing on projected inflation rather than hypothetical neutral rate levels. In March, the ECB lowered key interest rates by 25 basis points: the base rate was set at 2.65%, the deposit rate at 2.50%, and the marginal lending rate at 2.90%. The next ECB meeting will be held on April 17 and, judging by the rhetoric of officials, it may again bring decisions in favor of easing.Resistance levels: 1.0800, 1.0839, 1.0870, 1.0900.Support levels: 1.0765, 1.0730, 1.0700, 1.0654.USD/CAD: local weakening of the bullish trendThe USD/CAD pair is holding slightly above the key support level of 1.4257 and shows an increased likelihood of its breakdown downwards, as the Canadian currency strengthens amid growing concerns about US trade duties.Investors are increasingly considering a compromise scenario between Washington and Ottawa that could lead to an easing or partial lifting of restrictive measures, as well as analyzing Canada's retaliatory actions, including "mirror duties" as a tool to stabilize market sentiment. Additional support for the Canadian dollar is provided by confident macro statistics: in February, the consumer price index added 1.1% month—on-month, exceeding forecasts of 0.6%, and reached 2.6% year-on-year against expectations of 2.2%, which increases the chances of the Bank of Canada maintaining the current interest rate at 2.75% following the meeting on April 16.Resistance levels: 1.4480, 1.4665.Support levels: 1.4257, 1.4150, 1.3950.Gold market analysisThe XAU/USD pair continues to move in a steady upward channel, holding above the psychological mark of $3,000,0 per ounce against a confident fundamental background, contributing to an increase in interest in gold as a defensive asset.Last week it became known that the Chinese authorities launched a pilot project allowing ten leading insurance companies in the country to carry out operations with precious metals through standard contractual schemes. The first deal under the new initiative was concluded on March 25 between China Life Insurance and China Pacific Life Insurance and was a series of applications for spot trading in gold. Despite the limit of 1.0% of the total capital available for participation in such activities, the program may significantly increase interest in instruments related to precious metals, since the total revenues of the insurance sector of China have already exceeded 700 billion dollars. According to analysts at Bank of America Corp., the potential volume of demand from these organizations may reach 300 tons, which corresponds to about 6.5% of the global annual turnover in the gold market.Resistance levels: 3060.0, 3170.0.Support levels: 3000.0, 2860.0.Crude Oil market analysisBrent Crude Oil prices continue to rise modestly, remaining within the upward correction and consolidating above the level of $ 73.00 per barrel.Optimism in the market is formed against the background of the latest decisions of the OPEC+ alliance, suggesting a gradual easing of production restrictions in the total volume of 2.2 million barrels per day over the next 18 months. Although April was supposed to be the starting point of this process, the parameters of the first stage have already been adjusted due to the systematic excess of existing quotas by a number of countries. The updated production growth schedule clarifies that almost all parties to the agreement, with the exception of Algeria, are required to compensate for past deviations, which reduced the total volume of the April increase to 88.0 thousand barrels per day. Nevertheless, representatives of the cartel do not rule out a return to a tougher policy as early as June, if the recovery in demand from China turns out to be weaker than expected: recall that in 2024, China provided only 34.0% of the global increase in oil consumption (500.0 thousand barrels per day), against 50.0% in previous years. According to current forecasts, additional demand from the Chinese economy may decrease to 300.0 thousand barrels in 2025.Resistance levels: 73.70, 77.10.Support levels: 72.10, ...
EUR/USD: Bundestag supports expansion of defense budgetThe European currency is showing a moderate decline in the EUR/USD pair during Asian trading, correcting from yesterday's local highs. The instrument is testing the 1.0928 level for a downward breakdown, while market participants are waiting for new fundamental factors to appear that can set the direction of price movement.The key event of today will be the publication of February inflation data in the eurozone at 12:00 (GMT+2). The core consumer price index is expected to remain at the same level of 2.6% in annual terms and 0.6% on a monthly basis, while the harmonized index will maintain values of 2.4% and 0.5%, respectively. In the meantime, traders are analyzing data on business sentiment from the Center for European Economic Research (ZEW) published the day before: the German economic expectations index increased from 26.0 points to 51.6 points in March, significantly exceeding forecasts of 48.1 points. However, the index of assessment of the current economic situation decreased from -88.5 points to -87.6 points, which is worse than the expected value of -80.5 points. The same indicator for the eurozone rose from 24.2 points to 39.8 points, which only slightly exceeded the consensus forecast of analysts (39.6 points).Additional support for the euro was provided by the approval by the Bundestag of a bill on a significant increase in the national debt to finance defense and infrastructure spending: 513 deputies voted for it, 207 against it. The document is aimed at stimulating the German economy, which is under serious pressure due to high energy prices and increased competition from the United States and China. ECB Board member Olli Rehn noted that the tough trade policy of the White House has already negatively affected the growth of the European economy, but increasing domestic investment may become a driver of its recovery. At the same time, the EU member states of NATO will have to additionally allocate over 500 billion euros annually to meet Washington's requirements to increase defense spending to 5% of GDP.Resistance levels: 1.0954, 1.1000, 1.1050, 1.1100.Support levels: 1.0900, 1.0871, 1.0838, 1.0800.USD/CHF: economists are confident of reducing the SNB rate to 0.25%After two days of active decline, during which the USD/CHF pair updated its minimum levels since March 10, the instrument demonstrates a moderate correction in morning trading, testing the 0.8770 mark for a downward breakdown. Investors remain cautious ahead of the US Federal Reserve meeting, the outcome of which may become a key driver for further price movements.On Thursday at 09:00 (GMT+2), Switzerland will publish foreign trade data for February: in the previous month, exports increased to 24.45 billion francs, imports to 18.33 billion francs, and the trade surplus amounted to 6.12 billion francs. A meeting of the Swiss National Bank (NBS) will be held at 10:30 (GMT+2), and according to a Reuters poll, 90% of 32 analysts predict an interest rate cut to 0.25%, where it is likely to remain at least until 2026. This step is due to the fact that inflation in the country reached a four-year low of 0.3% in February, which confirms control over price pressure. However, the weakening of the franc in recent months poses risks of a repeat increase in inflation in the foreseeable future.Resistance levels: 0.8800, 0.8827, 0.8863, 0.8900.Support levels: 0.8758, 0.8730, 0.8700, 0.8669.GBP/USD: traders don't expect surprises from the Fed and the Bank of EnglandThe GBP/USD pair is correcting near the 1.2986 mark, receiving support against the background of the weakening of the US currency.The pound is showing a neutral movement ahead of the Bank of England meeting, which will be held tomorrow at 14:00 (GMT+2): most analysts expect the interest rate to remain at 4.50%, despite attempts by representatives of the regulator Catherine Mann and Swati Dhingra to achieve a more aggressive reduction of 25 basis points. At 09:00 (GMT+2), market participants will pay attention to the January employment data, however, according to preliminary forecasts, they will not have a significant impact on the dynamics of the pound.The US dollar is trading at 103.00 in USDX, trying to break down the key level for the first time since October. Today, investors' main attention is focused on the US Federal Reserve meeting, the decision of which will be announced at 20:00 (GMT+2): the probability of maintaining the rate in the range of 4.25–4.50% is estimated by the CME FedWatch Tool at 99.0%. Market confidence in the immutability of monetary policy parameters increased yesterday after the release of data on the real estate market: the volume of new home construction in February increased sharply from 1,350 million to 1,501 million, reaching a maximum over the past 13 months and confirming the recovery of the construction sector.Resistance levels: 1.3030, 1.3180.Support levels: 1.2950, 1.2770.Crude Oil market analysisThe price of Brent Crude Oil is moving in an upward trend, staying below the level of 70.00, due to the escalation of the situation in the Middle East and the intensification of trade disputes between the United States and its key partners. On Tuesday, the Israeli army again attacked positions of the Palestinian Hamas movement in the Gaza Strip, and the US armed forces attacked targets of the Yemeni Houthis. At the same time, President Donald Trump made a statement in which he blamed Iran for supporting this armed group.At the same time, investors are monitoring data on fuel reserves, which, according to a report by the American Petroleum Institute (API), increased from 4,247 million barrels to 4,593 million barrels, which may affect further market dynamics. Data from the US Energy Information Administration (EIA) is expected to be published today at 15:30 (GMT+2): preliminary forecasts suggest an increase in reserves from -1.448 million to 0.800 million barrels. If official statistics confirm an increase in storage volumes, oil may come under pressure amid fears of a slowdown in demand.Resistance levels: 70.90, 76.10.Support levels: 68.70, ...
GBP/USD: lower inflation in the US supports the poundThe pound sterling is strengthening in the GBP/USD pair, correcting against the background of the weakening of the US dollar and trading near the 1.2960 mark.Additional support for the British currency is provided by macroeconomic factors: tomorrow at 09:00 (GMT+2), UK GDP data is expected to be published. Experts predict a decrease in growth rates from 0.4% to 0.1% in monthly terms and a weakening from 1.5% in annual terms, which may strengthen the dovish mood of the Bank of England before the March 20 meeting. In addition, the regulator expanded its support for the banking sector, replacing weekly financing with semi—annual financing and allocating a record 2,127 trillion pounds as part of the REPO operation, the maximum amount since 2020.The US dollar is trying to regain its position, trading around 103.50 on the USDX index. The main focus of investors is yesterday's report on inflation in the United States: the consumer price index in February slowed from 0.4% to 0.2% in monthly terms and from 3.0% to 2.8% in annual terms, while the base indicator decreased from 3.3% to 3.1%. This dynamic reinforces expectations that the Federal Reserve System (FRS) will keep the rate at 4.25–4.50% at its meeting next week.Resistance levels: 1.3000, 1.3180.Support levels: 1.2920, 1.2760.USD/CHF: the pair maintains a sideways trendThe US dollar shows mixed dynamics in the USD/CHF pair during the Asian session, holding near the level of 0.8815: the activity of market participants remains low, despite the data on inflation in the United States published the day before.Today at 14:30 (GMT+2), investors will focus on inflation in the US manufacturing sector: according to forecasts, the annual producer price index for February will slow down from 3.5% to 3.3%, and the monthly indicator will decrease from 0.4% to 0.3%. At the same time, the base index excluding food and energy resources is likely to remain at 3.6% in annual terms and 0.3% on a monthly basis. The markets also expect data on the number of applications for unemployment benefits: initial applications for the week ending March 7 may increase from 221.0 thousand to 225.0 thousand, and repeat applications (for the week of February 28) may increase from 1,897 million to 1,900 million. On Friday at 16:00 (GMT+2), the University of Michigan consumer confidence index for March will be published: experts expect a decrease from 64.7 to 63.4 points.In Switzerland, February data on producer and import price indices will be released at 09:30 (GMT+2): a moderate monthly increase is expected from 0.1% to 0.2%, and an annual fix at -0.3%. Probably, these indicators will not have a significant impact on the future steps of the Swiss National Bank in the field of monetary policy.Resistance levels: 0.8827, 0.8851, 0.8875, 0.8900.Support levels: 0.8800, 0.8776, 0.8758, 0.8730.USD/JPY: Dollar decline is gaining momentumThe US dollar is showing a decline in the USD/JPY pair during the Asian session, correcting positions after two days of growth, which allowed updating local highs from March 6. At the moment, quotes are testing the 147.85 level for a downward breakdown, while market participants expect new macroeconomic triggers to appear.Investors in Japan continue to analyze the revised gross domestic product (GDP) data for the fourth quarter of 2024, published the day before. According to updated estimates, the indicator increased by only 0.6% in quarterly terms instead of the expected 0.7%, and the annual dynamics was adjusted from 2.8% to 2.2%. The slowdown in economic growth creates additional challenges for the Bank of Japan, which is considering a tougher monetary policy, but faces risks related to the instability of the national economy.Resistance levels: 148.55, 149.19, 150.00, 150.50.Support levels: 148.00, 147.00, 146.00, 145.00.Crude Oil market analysisBrent Crude Oil prices continue to move in a downward trend, holding slightly above the level of $ 70.00 per barrel.In the middle of the week, the market showed a slight increase against the background of the publication of reports on fuel reserves in the United States, but the general vector of movement is determined by the statements of OPEC + about plans to gradually increase production. According to February data, the countries participating in the agreement, with the exception of states exempt from quotas, increased production by 313.0 thousand barrels per day, bringing it to 35.5 million barrels per day. This exceeds the originally planned volumes by 67.0 thousand barrels, and the main increase occurred in Iraq (130.0 thousand barrels per day), Nigeria (60.0 thousand) and Gabon (50.0 thousand).Data on oil reserves in the United States turned out to be higher than analysts' expectations. The American Petroleum Institute (API) recorded an increase in reserves of 4.247 million barrels after a decrease of 1.455 million barrels a week earlier. In turn, the Energy Information Administration (EIA) reported an increase in inventories by 3.614 million barrels, compared with 1.448 million barrels a week earlier.Resistance levels: 71.20, 74.80.Support levels: 68.80, ...
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 ...
At the morning trading on Tuesday, oil prices are declining. By 7.42 GMT, Brent oil fell to 72 dollars 85 cents per barrel, or by 0.05% compared to the closing price of trading the day before. The price of WTI oil fell to 71 dollars 22 cents per barrel, or 0.06%. Pressure on oil prices is exerted by information about the deterioration of the epidemiological situation in Asian countries. In this region, there is an increase in the number of infections with a new strain of coronavirus infection "delta". The authorities of a number of Asian countries were forced to tighten restrictive measures, including on movement. Analysts at Commonwealth Bank Of Australia note that the spread of the delta strain around the world will become a serious threat to the recovery of oil demand. Mobility restrictions are already being observed in some parts of the Asian region. This is the reason for the fall in oil demand. More than 60% of the world's oil consumption is accounted for by ...