Oil quotes fell after G7 price cap - 7.12.2022

Today, the US dollar index is slightly rising for the 3rd day in a row. There was no particular positive in the US yesterday. The dollar continues to win back a good ISM United States Non-Manufacturing PMI (56.5), published on Monday. No significant economic statistics are expected in the US today. But there will be a meeting of the Bank of Canada, at which the rate can be raised to 4% from 3.75%. Australia's GDP for the 3rd quarter was published this morning, which showed a good growth of +5.9% y/y. Also released the trade balance of China and unemployment in Switzerland for November. They turned out to be slightly worse than expected.

Bitcoin quotes have been hovering in a narrow range around the $16,600 mark for the 4th week in a row. Its share in the total capitalization of the crypto market is now only 38%. Whereas 2 years ago it exceeded 70%. Theoretically, large bitcoin holders could take some promotional measures to restore its attractiveness among crypto players.

Yesterday, US stock indices fell for the 4th day in a row. In addition to possible plans for a further increase in the Fed's rate, the risks of an economic recession became a negative factor. The European Union has restricted the advertising activity of Meta Platforms. On Tuesday, its shares fell 6.8%, dragging the entire IT sector down with it. Quotes of Apple and Alphabet fell by 2.5%, Amazon.com - by 3%, Microsoft - by 2%. Shares of Bank of America Corp fell 4.3% after a negative outlook for next year. S&P 500 Energy (-2.6%) became the drop leader among sectorial indices yesterday. This was facilitated by the decline in world prices for hydrocarbon raw materials. Boeing announced it was ending production of the 747 jet and its shares fell 3.6%.

On Tuesday, oil prices fell for the 3rd day in a row. The price of Brent has fallen below $80 per barrel and is near the levels of January this year. Several negative factors contributed to this. Developed countries have agreed to limit the price of Russian oil (G7 price cap) to $60 per barrel as part of tougher economic sanctions. OPEC+ did not further cut production at its meeting on Sunday. In China, the number of coronavirus patients remains relatively high and the risks of resuming quarantines remain. Among the positive factors that can support oil quotes, we can note the message of the American Petroleum Institute (API) about the decrease in oil reserves in the US for the week by 7.85 million barrels. This happened for the 4th week in a row. US oil inventories are now at 40-year lows. G7 price cap could become a strong support level for Russian oil, which on Friday cost about $67 per barrel. In November, oil imports to China grew by 12% y/y and turned out to be the highest in the last 10 months. American WTI oil is now worth about $74 per barrel. Earlier, the US authorities mentioned that at a price of about $70 per barrel, oil purchases to replenish the U.S. could begin. Strategic Petroleum Reserve.

Natural gas quotes in Europe on ICE Dutch TTF have been trading around $1,500 per 1,000 cubic meters for a week now. They are not declining despite the fall in US natural gas prices by almost a third in 2 weeks. However, now American gas is correcting upwards.