MH Daily Bulletin: February 24

February 24, 2023 • Posted in Daily Bulletin

News relevant to the plastics industry:

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  • Oil rose 2% Thursday on expectations of steep cuts to Russian production next month.
  • In mid-morning trading today, WTI futures were up 0.1% at $75.49/bbl, Brent was up 0.2% at $82.37/bbl, and U.S. natural gas was up 3.9% at $2.40/MMBtu.
  • The Energy Information Agency confirmed that U.S. crude stocks rose by 7.6 million barrels last week, putting inventories above their five-year average.
  • After a record-setting year of profitability in 2022, shale producers are battling steep cost inflation, which has driven Devon Energy’s breakeven price to $40/bbl, up from $30/bbl a year ago.
  • The CEO of Pioneer Natural Resources expects oil to rise as high as $100/bbl later this year.
  • The war in Ukraine has redrawn global trade routes, with a host of trading companies stepping in to move Russian oil to global markets despite Western sanctions.
  • Russia plans to cut oil exports from its western ports by up to 25% in March, more than previously announced, in a bid to lift prices.
  • Europe will need increased volumes of LNG this year to maintain full storage supplies, analysts say.
  • Uzbekistan is falling behind on long-term plans to raise gas output.
  • Germany will ban gas and oil heating in new or renovated buildings starting next year as part of efforts to meet climate targets.
  • A group of carbon-removal companies has formed a coalition to lobby the U.S. federal government on carbon capture policies.
  • After reporting a fourth-quarter loss, BASF said it will cut 2,600 jobs in Europe, mostly in Germany, and suspend share buybacks.

Supply Chain

Domestic Markets

  • The personal consumption price index, closely watched by the Federal Reserve, was up a higher-than-expected 0.6% this month.
  • Consumer spending surged 1.8% in January, the most in two years.
  • The U.S. economy is exhibiting strength early this year after posting solid but weakening growth at the end of 2022.
  • After falling 2.7% in December, costs for construction materials jumped over 1% in January and were up 4.9% year over year.
  • Mortgage rates rose for a third straight week, hitting 6.5%, the highest level since November.
  • Total U.S. home values fell 4.9% in the second half of 2022, the steepest drop in over a decade.
  • Online travel agency Booking Holdings set a record in January for monthly bookings.
  • Domino’s Pizza missed quarterly sales estimates after hiking delivery and menu prices the past year.
  • Dollar General forecast full-year profit well below expectations after being forced to offer deep markdowns to clear excess inventory.
  • Moderna forecast declining COVID-19 vaccine sales and higher costs for 2023, raising concerns of a potential full-year loss.

International Markets

The World's Most-Sanctioned Countries
  • Euro zone inflation eased to 8.6% in January from 9.2% a month earlier.
  • Japan’s consumer inflation hit a 41-year high of 4.3% in January
Japan Inflation Rate
  • Japan’s central bank intends to maintain easy monetary policy to hold down inflation, officials say.
  • Mexico’s headline inflation fell to 7.76% in early February, a steeper drop than expected.
  • A slowdown in grain exports from Ukraine is threatening to raise global bread prices.
  • Alibaba Group Holding reported better-than-expected quarterly revenue Thursday, helped by China’s easing of COVID-19 curbs.
  • High ticket prices are not dissuading travelers from the air, as international airlines report bumper profits after suffering big losses during the pandemic.
  • Flights to and from Amsterdam’s Schiphol airport will be limited to 460,000 per year, a bid to cut down on noise and environmental pollution.
  • Belgium set new flight limits for Liege Airport, primarily a cargo airfield, due to environmental concerns.

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