Global oil markets are reeling from war in Eastern Europe:
WTI surged over 8% Tuesday to settle at $103.41/bbl, while Brent rose 7% before closing at $104.97/bbl, the biggest one-day gains in almost two years. Futures continued climbing in early morning trading today, with WTI up 5.6% at $109.00/bbl, Brent up 5.8% at $111.00/bbl and U.S. natural gas 3.6% higher at $4.73/MMBtu.
Russia’s Urals crude traded at a steep $18/bbl discount to Brent yesterday, and even then could not find buyers, suggesting refiners in Japan, South Korea and China have joined Europe and the U.S. in slowing purchases.
China is scaling back imports of Russian coal as traders struggle to secure letters of credit from sanction-wary banks. Prices for coal from other exporters — including Indonesia, South Africa and Australia — are sharply rising.
The Russian government issued an emergency decree to block foreign companies — notably several energy giants including BP and Shell — from exiting investments in the nation, although it is unclear what the decision entailed and how it would be enforced.
The U.S. national average for a gallon of gas stood at $3.62 Tuesday, up 24 cents from a month ago. Gas prices are sharply rising in the U.K. and Netherlands.
U.S. crude inventories are set for a sharp drawdown this week.
A crude pipeline from Alberta to Canada’s Pacific Coast is set to triple capacity to 890,000 bpd by the third quarter of 2023, boosting the nation’s ability to export.
U.S.-based Occidental Petroleum is buying back $2.5 billion in debt after beating market expectations on a swing to profit in the fourth quarter.
Cargo flights along major trade routes through the region have slowed, according to an analysis by logistics firm Flexport. Flights between New Delhi and London, for example, were about 8% longer on average between Wednesday and Sunday, according to data from Flightradar24.
Volkswagen will idle some production lines at the world’s largest car plant in Wolfsburg, Germany, next week before a broader shutdown the following week, citing shortages from Russian suppliers.
Apple and Dell halted all product sales in Russia.
The Baltic Dry Index, a bellwether of the general shipping market, reversed months of declines and rose to 2,040 this week:
A gauge of U.S. manufacturing order backlogs rose by 8.6 points from January to February, the largest jump in 11 years, while supplier delivery times slowed further.
Operators of the Ports of Savannah, Wilmington and Jacksonville agreed to transition away from a multi-contributor chassis pool to a single provider over the next 18 months, an effort to update and expand chassis fleets.
Toyota will restart production in Japan today after a cyberattack took down one of its suppliers, sparking concerns over the automaker’s supply chain vulnerabilities.
A Philadelphia real estate firm is partnering with self-driving truck maker Embark Trucks to buy land near metro areas where autonomous trucks can move trailers to human-driven delivery vehicles.
Domestic Markets
The U.S. reported 47,017 new COVID-19 infections and 1,691 virus fatalities Tuesday. Average daily cases have dropped to 66,000 per day, down from more than 800,000 per day in mid-January.
The average 30-year fixed mortgage rate is down to 3.9% from 4.18% last Friday, the largest two-day drop since the start of the pandemic. For-sale home inventory remains at the lowest in a generation, while home prices are at record highs, up nearly 20% from the same time last year.
Auto lenders extended $734 billion in loans last year, a record high in data going back to 2004, as dealerships took advantage of high demand to grab more fees from financing services.
Electric vehicles accounted for 4.5% of all U.S. car sales in the fourth quarter, an all-time high, according to Kelley Blue Book.
GM sold its 7.5 million shares in struggling electric-truck startup Lordstown Motors for a loss last quarter, as the Ohio-based electric vehicle maker underwhelms on production estimates.
Target’s annual revenue crossed $100 billion last year, a first, as the retailer warns of slowing sales in 2022. Kohl’s saw the opposite, posting lower-than-expected quarterly results alongside a higher sales forecast for this year.
Sixteen states and a consortium of agriculture and petrochemical associations are challenging the EPA’s new rule requiring a 28.3% reduction in vehicle emissions between 2023 and 2026.
International Markets
The financial consequences of Russia’s invasion of Ukraine continue to spread:
In just under a week, Russia’s invasion of Ukraine has reversed three decades of investment in the country by Western and other foreign businesses following the collapse of the Soviet Union.
Large financial institutions — including European exchange operators, the largest U.S. and foreign banks, and possibly the world’s giant commodity traders — are freezing funds with exposure to Russian equities amid a plunge in markets.
New COVID-19 cases globally fell 16% last week, while virus fatalities fell 10%.
New COVID-19 cases in mainland China are up 171% over the past two weeks to more than 300 per day. The nation’s postal service will start testing all overseas mail for presence of the virus.
London’s subway, one of the largest transit systems in the world, shut down on Tuesday as 10,000 workers went on strike over pay and working conditions.
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