Oil prices fell over 5% to a two-week low on Monday amid talks of a diplomatic solution to the war in Eastern Europe and prospects of reduced demand in COVID-hit China. WTI has fallen 20% since closing at the highest price since 2008 just one week ago.
In mid-afternoon trading today, WTI futures were down 7.4% at $95.36/bbl, Brent was down 7.5% at $98.85/bbl and U.S. natural gas was down 1.9% at $4.57/MMBtu. Brent and WTI have logged their most volatile 30 days since June of 2020.
Oil prices could dip later this week after the U.S. Federal Reserve raises interest rates, making dollar-denominated oil more expensive for holders of foreign currencies.
More oil news related to the war in Europe:
The EU, which gets 40% of its natural gas and 25% of its oil from Russia, faces increasing pressure to join the U.K. and U.S. in banning Russian energy imports.
Very Large Crude Carriers are facing a margin squeeze as marine fuel costs have spiked over 40% since Russia’s invasion of Ukraine, while rates to ship from the Middle East have not included premiums charged elsewhere.
Freight carloads on U.S. railroads in the category that includes fracking sand rose 36.3% in February from the year before, a sign that the U.S. drilling sector is stirring in response to soaring oil prices.
Container ship queues are rising at ports across China, reflecting impacts from the nation’s COVID-zero policies amid rising infection counts. The backlog has doubled to 72 vessels in just the past two weeks off Qingdao port, one of the nation’s largest.
Hong Kong’s COVID restrictions are causing its flagship carrier, Cathay Pacific, to operate passenger flights at just 2% of pre-pandemic capacity and cargo routes at under one-third of pre-pandemic capacity, the airline said.
Container ships saw an average delay of 7.38 days to get to ports across the globe in January, down slightly from December but the sixth straight month the figure has exceeded seven days.
China remained the top U.S. trading partner in January, with trade rising 14% year over year on a 51% surge in Chinese imports and an 11% decline in U.S. exports.
The number of self-employed workers in the U.S. stood at 10 million in February, 400,000 higher than at the beginning of the pandemic.
Ford’s new “Electric University” training program will boost electric vehicle servicing capabilities in its dealer network.
More news related to the war in Europe:
By Sunday, over 350 companies had either suspended, halted, or restricted their Russian operations in reaction to the Kremlin’s invasion of Ukraine.
Citigroup is cutting more ties with Russia and will halt all new business in the nation. The firm has nearly $10 billion of exposure in Russia, the most of any U.S. bank, and warned it could lose nearly half that in a worst-case scenario.