A big rise in oil prices
Posted: February 12th, 2023, 2:20 pm
Hi folks,
So we now another supply constraint:
MOSCOW, Feb 10 (Reuters) - Russia will cut oil production by 500,000 barrels per day, or around 5% of output , in March, Deputy Prime Minister Alexander Novak said on Friday, after the West imposed price caps on Russian oil and oil products.
The price of Brent crude rose on the news of the output cut from Russia, the world's second-largest oil exporter after Saudi Arabia, increasing by more than 2.5% on the day to $86.6 per barrel.
"As of today, we are fully selling the entire volume of oil produced, however, as stated earlier, we will not sell oil to those who directly or indirectly adhere to the principles of the 'price cap'," Novak said in a statement.
"In this regard, Russia will voluntarily reduce production by 500,000 barrels per day in March. This will contribute to the restoration of market relations."
https://www.reuters.com/business/energy ... 023-02-10/
and an increase in demand:
"Chinese oil demand is on course to rebound due to the recent relaxation of the country's zero-COVID-19 measures," it said in a separate section, adding that plans to expand fiscal spending were also likely to support demand.
OPEC expects Chinese demand to grow by 510,000 bpd in 2023. Last year, the country's oil use posted its first contraction for years due to the COVID containment measures.
In the report, OPEC raised its 2022 world economic growth estimate to 3%, saying growth last year in the United States and the euro zone had surpassed previous forecasts, and left 2023's forecast steady at 2.5%.
As well as China, the report said the U.S. Federal Reserve managing a soft landng for the U.S. economy - which it called the most likely outcome - and further commodity price weakness were sources of upside.
https://www.reuters.com/business/energy ... 023-01-17/
Some are predicting $100+ barrel price. What is the likely effect to macroeconomics? Will policy makers opt for more tightening due to prediction of fuel price inflation, or easing since a big rise in energy costs is effectively assisting them in the roles as slowing down economic recovery and heralding subsequent deflation?
Matt
So we now another supply constraint:
MOSCOW, Feb 10 (Reuters) - Russia will cut oil production by 500,000 barrels per day, or around 5% of output , in March, Deputy Prime Minister Alexander Novak said on Friday, after the West imposed price caps on Russian oil and oil products.
The price of Brent crude rose on the news of the output cut from Russia, the world's second-largest oil exporter after Saudi Arabia, increasing by more than 2.5% on the day to $86.6 per barrel.
"As of today, we are fully selling the entire volume of oil produced, however, as stated earlier, we will not sell oil to those who directly or indirectly adhere to the principles of the 'price cap'," Novak said in a statement.
"In this regard, Russia will voluntarily reduce production by 500,000 barrels per day in March. This will contribute to the restoration of market relations."
https://www.reuters.com/business/energy ... 023-02-10/
and an increase in demand:
"Chinese oil demand is on course to rebound due to the recent relaxation of the country's zero-COVID-19 measures," it said in a separate section, adding that plans to expand fiscal spending were also likely to support demand.
OPEC expects Chinese demand to grow by 510,000 bpd in 2023. Last year, the country's oil use posted its first contraction for years due to the COVID containment measures.
In the report, OPEC raised its 2022 world economic growth estimate to 3%, saying growth last year in the United States and the euro zone had surpassed previous forecasts, and left 2023's forecast steady at 2.5%.
As well as China, the report said the U.S. Federal Reserve managing a soft landng for the U.S. economy - which it called the most likely outcome - and further commodity price weakness were sources of upside.
https://www.reuters.com/business/energy ... 023-01-17/
Some are predicting $100+ barrel price. What is the likely effect to macroeconomics? Will policy makers opt for more tightening due to prediction of fuel price inflation, or easing since a big rise in energy costs is effectively assisting them in the roles as slowing down economic recovery and heralding subsequent deflation?
Matt