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Supply
Oil prices jumped over 6% Tuesday as lockdowns eased in Shanghai and new data showed Russian production fell to an almost two-year low to start the week.
In mid-day trading today, WTI futures were up 3.3% at $103.90/bbl, Brent was up 3.7% at $108.50/bbl, and U.S. natural gas was up 4.3% at $6.97/MMBtu.
In its most recent report, OPEC shaved 480,000 bpd off its forecast for growth in global oil demand this year while still expecting consumption to surpass 100 million bpd for the first time of the pandemic. The report also shows the cartel’s output rose by just 57,000 bpd in March, well below a 253,000-bpd target.
U.S. natural gas prices are up 79% so far this year, reversing the usual spring declines as commodities fluctuate wildly across the board.
The American Petroleum Institute reported a larger-than-expected build this week of 7.7 million crude barrels, as traders await government data to be released today.
U.S. shale could see a production boost of over 200,000 bpd in 2022, OPEC predicts, even as drillers continue to focus on capital discipline. The move corresponds with steadily rising foreign demand for the nation’s petroleum products:
The latest forecasts from the U.S. government show both natural gas production and power consumption rising steadily to new highs for at least the next two years.
Sasol, South Africa’s biggest fuel producer, dropped plans to invest in a large new pipeline over fears of getting stuck with obsolete infrastructure as the world shifts from fossil fuels, according to executives.
Russia’s average oil output fell more than 6% — or 700,000 bpd — to 10.32 million bpd during the first 10 days of April, as Western sanctions dent foreign demand and cause the nation’s domestic storage to push capacity limits.
Indian Oil Corp., which bought Russian Urals crude in previous tenders, has removed the grade from its latest crude tender after the U.S. warned that buying Russian energy was not in India’s best interests.
Tanker charters from Russia’s Baltic ports to northwest Europe have surged to over $345,000 per day, the highest in at least 14 years.
Wholesale electricity prices in France surged well beyond levels that trigger renewable developers to repay government subsidies, creating a 5.9 billion euro windfall for state coffers.
A devastating tropical storm struck the central Philippines yesterday, prompting flooding and landslides that killed more than 20 people.
Two major international bridges — Pharr-Reynosa on Texas’ southern tip and Ysleta Bridge in El Paso — were effectively shut down Tuesday after Mexican truckers blocked lanes to protest a new decree from the Texas administration that forced them to wait hours or days to bring products into the U.S. The shutdowns threaten billions of dollars in trade and are causing backups at smaller crossings where cargoes are diverted.
Chinese year-over-year imports declined last month for the first time since early in the pandemic.
More Shanghai factories, including two of key Apple assembler Pegatron, are halting production as lockdowns hamper transport services.
First-quarter volumes at the Port of Los Angeles climbed 3.5% to an all-time high of 2.68 million TEUs, with greater staffing helping reduce vessel backups.
Inflation is slowing do-it-yourself construction activity in the U.S., creating an inventory glut at mills and a 30% decline in the price of lumber since the start of the year.
More warehouses are turning to contractable, intelligent robots to handle spikes in parcel delivery volumes amid a lack of manual labor to handle throughput.
Global electric vehicle (EV) charging infrastructure is expanding at a notably slower pace than EV sales, suggesting continued low returns for investors in the emerging technology. Over 20 million plug-in EVs are expected to be on roads this June, up from just 1 million in 2016.
GM said Tuesday it would buy cobalt from Swiss miner Glencore to use in its electric vehicles, as automakers around the world scramble to stock up on the material amid supply chain disruptions.
Walmart executives say a campaign to get suppliers to decarbonize has pushed the firm past the halfway point in lowering emissions by 1 billion metric tons, as over 70% of suppliers have started reporting emissions.
ArcelorMittal, the world’s biggest steelmaker outside China, will partially restart operations at a large factory in Ukraine following a month-long shutdown. Ukrainian steel maker Metinvest is also resuming some output.
Boeing lost about 2% of its overall backlog of 4,200 commercial jet orders due to fallout from Western sanctions on Russia, the firm said.
State-owned Russian Railways defaulted on a bond obligation due Monday, setting the stage for insurance payouts on a Russian corporate borrower for the first time since the invasion.
Egypt, the world’s biggest buyer of wheat, is down to 2.5 months of supply after canceling several orders from Russia.
Domestic Markets
The U.S. reported 27,853 new COVID-19 infections and 561 virus fatalities Tuesday.
The BA.2 subvariant of Omicron now accounts for over 90% of infections in the U.S. Northeast, putting health experts on edge about a larger potential virus surge.
Philadelphia reimposed an indoor mask mandate, the first large U.S city to do so, after COVID-19 cases jumped 50% over the past 10 days.
New COVID-19 cases in New York City have tripled since March 1 to an average of 1,600 per day. Four of the U.S.’s top five metro areas with rising COVID-19 cases are in New York state.
Federal masking requirements for planes and public transport are set to expire April 18, as the White House stays silent on whether it will extend the measure.
Inflation jumped the most in energy and food, while the cost of restaurant meals and used cars eased.
In positive news, so-called “core” prices — a key Fed barometer for setting monetary policy — rose a lower-than-expected 0.3% in March, the smallest gain in six months.
Over 80% of Americans say they will cut back on spending due to rising prices.
The U.S. budget deficit narrowed sharply to $192.7 billion in March, new data shows, down from nearly $660 billion during stimulus payouts a year ago.
Soaring prices for used cars sent CarMax’s fourth-quarter sales down a larger-than-expected 6.5%, while more buyers sought vehicle loans longer than 72 months.
Digital ad revenue jumped 35% in the U.S. last year, the biggest gain since 2006, with almost 80% of advertising taking place on just 10 digital platforms including Google, Facebook and Amazon.
The Omicron variant of COVID-19 accounted for 99.2% of new cases globally over the past week. Reported cases and deaths fell for the third consecutive week, but World Health Organization officials warned that much of the decline may relate to the dismantling of tracking and monitoring programs.
Panic-buying is spreading across China as more regions, including Beijing and the industrial hub of Suzhou, report COVID-19 cases and brace for Shanghai-like lockdowns. In Shanghai, officials threatened strict punishment for people who violate pandemic restrictions.
The World Bank is preparing a nearly $1.5 billion aid package to support essential services in Ukraine, raising the bank’s total support to over $2.4 billion.
A former Russian finance minister says the nation’s GDP could fall up to 10% this year, the biggest contraction in almost three decades.
Singapore’s BOC Aviation plans to buy 80 Airbus A320 jets in what is the aircraft-leasing firm’s largest order to date.
French luxury retailer LVMH saw first-quarter sales jump 23% to $19.5 billion, with executives predicting an upcoming slowdown caused by lockdowns in China.