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May 26. The oil market is growing after the publication of data on oil reserves

World prices for «black gold» rose on Wednesday evening after the US Department of Energy announced a reduction in crude oil reserves in the country. The current quotation for Brent is $68.75 per barrel, WTI oil is quoted at $66.23 per barrel.

According to a report by the US Department of Energy, commercial oil reserves in the United States over the past week fell by 1.7 million barrels – to 484.3 million. Analysts at the same time expected a decrease in the index by only 1.05 million barrels.

In addition, the decline in stocks of distillates and gasoline also turned out to be stronger than experts' forecasts: distillate stocks decreased by 3 million barrels (the forecast assumed a decrease of 1.9 million), and gasoline – by 1.7 million (with a forecast of a decrease of 0.61 million barrels ).

Markets also continue to monitor the situation around Iran's nuclear deal, assessing the prospects for the return of Iranian oil to the market.

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May 27. US labor market: what's the news?

According to the US Department of Labor, the number of Americans who filed new applications for unemployment benefits fell more-than-expected last week to 406 thousand. Economists predicted 425 thousand applications. Last week, the number of requests was fixed at the level of 478 thousand.

The decline came mainly on the back of fewer layoffs, as companies are in dire need of workers to meet the growing demand driven by the rapidly recovering economy. What's more, the pandemic-related business restrictions have been lifted as more than half of the US adult population is fully vaccinated against the coronavirus.

And while the number of applications still far exceeds the 200,000 to 250,000 range considered compatible with healthy labor market conditions, they fell from a record 6.149 million in early April 2020.

23 states, including Florida and Texas, have announced the end of federal government-funded unemployment programs next month. These programs include a $300 weekly subsidy that businesses say discourages unemployed people from finding work.

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There will be no miracle. Experts predicted a weekly and annual scenario for the development of the oil market

According to analysts of commodity markets, the coming week for oil quotes will be quite stable due to the support of domestic industry statistics from the United States.

According to American statistics, the US black gold market is now experiencing an active reduction in reserves of raw materials to the lowest levels over the past three months.

Experts believe that such dynamics of the oil market indicates the rapid recovery of the world's major economies. And this, in turn, causes an increase in the volume of consumption of hydrocarbons. As a result, the combination of these factors partially equalizes progress in a new nuclear agreement with Iran.

At the same time, the strengthening of the US dollar and the psychological barrier of $ 70 per barrel act as a definite limiting factor for further uncontrolled growth in oil prices. To take that high, the market will definitely need more significant events and news.

Summarizing all of the above, in the short term (week from May 31 to June 4), oil prices for North Sea Brent crude oil will be in the $ 67-70 per barrel corridor.

As for the longer-term forecasts of analysts, experts here assume an average price of $ 55-60 per barrel for oil this year. According to them, the OPEC + agreement is still the determining factor for quotations of black gold.

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Analysts: It's too early to wait for Bitcoin to recover

J.P. Bank experts Morgan predicts that it is too early to wait for a recovery in Bitcoin, which is currently experiencing a fall from the $60K area to $ 35-36K.

Previously, analysts had already expected that Bitcoin's failure to overcome the $60,000 threshold would lead to bearish signals and further curtailing positions in this cryptocurrency. Perhaps this was a significant factor in the correction last week.

However, there are no signals of a long-term decline yet. According to experts, the price must fall to the level of $26 thousand before the cryptocurrency can reverse the main trend.

Over the long weekend in the US, Bitcoin plummeted due to the Memorial Day holiday: it traded at around $36,311 on Saturday and then dropped to $33,633. By Monday night, the currency recovered slightly to $36,833. Today's trading remained volatile.

Recall that in May, many factors influenced the bitcoin rate. Among them are negative tweets from Tesla CEO Elon Musk, as well as concerns about impending government regulation from the United States and China.

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Oil rises sharply after OPEC+ meeting

After the completion of the OPEC+ ministerial meeting, Brent quotes rose to $71.30 per barrel. The last time such price values were recorded in May 2019.

The OPEC+ ministers held the shortest meeting in history and within 15-20 minutes adopted the recommendations of the OPEC+ ministerial monitoring committee to maintain the planned plans to increase oil production in July. Production levels after July were not discussed. According to the deal signed a year ago, after July, the alliance plans to keep the production level unchanged until April 2022.

The OPEC+ Technical Committee, whose meeting took place the day before, came to the conclusion that a surplus in the oil market should not be expected even if the forecast for demand for the current year is reduced.

Thus, the decision was again made to gradually restore oil production: in May, the countries participating in the agreement can increase production by 350 thousand barrels per day, in June – by the same amount, in July – by 441 thousand barrels per day. In addition, Saudi Arabia lifted its voluntary restrictions: 250 thousand b/d in May, 350 thousand b/d in June and 400 thousand b/d in July.

In addition, market participants continue to monitor the progress of negotiations on the Iranian nuclear deal. Tehran said it hopes for a full restoration of the agreements before the expiration of the current government's term in August.

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June 03. Beige Book: US economic growth accelerates

The US Federal Reserve Beige Book was published last night – a document containing summaries and comments from the Fed on the economic situation in the country.

According to the report, the US economic recovery accelerated between April and May, despite supply bottlenecks, hiring new hires, and rising prices in many parts of the country.

In addition, the widespread use of Covid vaccinations and the weakening of quarantine measures had a strong impact on consumer spending: their growth is primarily associated with an increase in public spending on travel and restaurants. At the same time, the level of sales of passenger cars remained stable, and this is due to a slowdown in production due to a shortage of semiconductors.

In general, production in the country continues to grow, but many manufacturers report widespread material and labor shortages. The number of employees in the United States is growing relatively steadily, with the largest gains in employment shown in the catering and retail sectors. The growth in wages was also moderate, but it is noted that more and more employers have raised wages and offered bonuses.

The Beige Book is usually published about two weeks before the next Fed meeting. The next meeting of the FRS leadership will take place on June 15-16.

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June 04. The oil market is in the final phase of the growth cycle

Analysts believe that the oil market is currently in the final phase of its growth cycle, and prices may soon peak.

Norbert Rücker, head of the Next Generation forward-looking research department of the Swiss bank Julius Baer, believes that by mid-year oil prices will move significantly above the $70 per barrel mark. And this will be the maximum level from which a long-term correction is likely.

At the moment, Brent oil quotes are trading slightly above the $70 level. On Tuesday, the price even reached $71.94 a barrel for the first time since March 8.

Experts believe that the rise in prices was promoted by positive dynamics in demand and likely delays in nuclear negotiations with Iran. Additional support to the market was provided by the results of the OPEC+ meeting, according to which it was decided to continue easing restrictions on oil production in July.

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June 07. The European Parliament named the countries to be admitted to the European Union

The head of the European Parliament David Sassoli in his interview called for the admission of the Western Balkan countries to the European Union. At the same time, the politician noted that such an enlargement of the EU would become «a positive project for peace and prosperity.»

These are countries such as Albania, North Macedonia and Serbia. The expansion of the EU's territory can have enormous benefits both for the Western Balkan region itself and for Europe as a whole, as it will help «ensure a stable, prosperous and peaceful continent.»

According to Sassoli, the countries of the Balkan Peninsula will be able to join the European Union as soon as they meet all the necessary criteria. And at the moment, all countries have yet to complete some reforms.

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June 08. Europe faces an unplanned gas shortage

Gas prices in Europe remain at an all-time high, although gas prices generally fall in summer. The reason for this was the lack of fuel and the impossibility of competition from coal.

In particular, spot prices at the largest hub, TTF, consistently exceeded $300 per thousand cubic meters throughout May and did not retreat from the highs in the summer. Yesterday's gas price was marked at $349 per thousand cubic meters. A similar situation on the European gas market was observed only in 2011-2014. Then this was due to high oil prices (consistently above $100 per barrel).

The current deficit was caused by supply constraints from Norway and Russia, the main gas suppliers. In Norway, preventive work has begun on the production infrastructure, and the Russian Gazprom refuses in principle to increase the volume of supplies.

At the same time, the supply of coal, which usually replaces gas in the energy sector, does not increase. Firstly, the price of coal has risen (more than 160% per year), and secondly, the fees for its use have sharply increased in Europe. Considering all of the above, analysts do not expect the picture of gas shortages in Europe to change before the end of this year.

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June 09. IRS wants to receive data on transactions in cryptocurrencies

US Internal Revenue Service (IRS) Commissioner Charles Rettig said Congress needs to give the tax authorities legislative authority to collect information on cryptocurrency transfers in excess of $10,000.

Currently, more than 8600 crypto-exchanges have been created in the world, and the capitalization of the cryptocurrency market exceeds $ 2 trillion. At the same time, most virtual cryptocurrencies are created in such a way as to remain out of sight of the authorities. Moreover, there are more and more cases of illegal use of digital currencies by cybercriminals and hackers.

In addition, the huge revenues generated by the growth of crypto assets are eluding the IRS, creating a tax hole of about $1 trillion a year (the difference between legally owed and collected taxes).

Rettig suggests informing the IRS about cryptocurrency transfers in the same way banks do about money transfers, and brokers who report to the IRS about securities transactions. However, this initiative can be implemented no earlier than 2023.

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June 10. World oil prices accelerated growth

On Thursday evening, world oil prices accelerated their growth, approaching $73 per barrel. The market was supported by demand signals from the monthly OPEC report.

In particular, the price of August futures for North Sea Brent crude oil mixture rose $72.90 per barrel, July futures for WTI rose to $70.64 per barrel.

Oil quotes support optimism for a recovery in demand, with traders assessing the June OPEC report. The organization noted that accelerating vaccination programs in many countries and increasing population mobility will positively affect demand in the second half of this year.

In addition, OPEC retained its forecast for the growth of oil demand in the world in 2021: the alliance still expects an increase in demand by 6 million barrels per day – to the level of 96.58 million barrels per day.

Additional support to the oil market was provided by yesterday's data from the US Department of Energy on oil reserves in the country. Inventories fell by 5.24 million barrels, which was better than the forecast for a reduction of 2 million.

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11.06. ECB raised its forecast for GDP growth in the euro area

According to the latest forecast of the ECB, the growth of GDP in the eurozone this year will amount to 4.6%, which is significantly higher than the March forecasts. This became known during the speech of the head of the regulator Christine Lagarde at a press conference following yesterday's meeting of the Board of Governors.

Lagarde also noted that this assessment of the economy is presented in the baseline scenario of macroeconomic forecasts by the Central Bank for June 2021. According to these forecasts, GDP growth in 2022 will grow by 4.7%, and in 2023 by 2.1%.

Compared to previous ECB estimates, which were made in March, GDP growth forecasts for 2021 and 2022 have been revised upward (4% and 4.1%, respectively). The forecast for 2023 remains unchanged.

According to inflation forecasts, consumer prices are expected to rise 1.9% in 2021, 1.5% in 2022, and 1.4% in 2023. According to the March forecast, inflation was expected to be 1.5% this year, 1.2% next year and 1.4% in 2023. The correction of estimates is associated with the dynamics of energy prices.

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EUR/USD: Euro is trying to resist, while the US dollar is not showing vulnerability

Contrary to the US currency, the Euro has maintained relative stability for a long time, without making sharp up or down movements. However, experts believe that a lot can now change, and the downward trend can push the euro to the bottom.

The ECB's actions at the end of last week contributed to a moderate decline in the European currency. It can be recalled that the representatives of the regulator came to the conclusion about the exaggerated impact of inflation on the economy. According to Robert Holzmann, ECB Board Member, excessive concerns about inflation are groundless, and it is now under control. The current situation contributed to the fall in the yield of European bonds, pulling the euro.

The single currency noticeably fell for the first time in a long time, although it managed to recover. Last Friday, the EUR/USD pair lost 0.2%, declining to the level of 1.2135. The Euro also showed a significant and sharp drop. On Monday morning, the main currency pair was trading near the level of 1.2102, trying to catch up.

Analysts believe that the current situation indicates an imbalance in sales, as the current decline in the EUR almost completely offsets the recent rise. According to experts, the EUR/USD pair was dominated by a "bearish" mood at the end of the previous week. Such a scenario led to the fact that traders began to reduce their euro positions after two months of increasing them. Experts are sure that the strengthening of this trend will contribute to the collapse of the EUR/USD pair.

In this case, they consider the level of 1.2123 as a new resistance level for the Euro currency. The beginning of the new week was marked by a slight rise in this currency, which began at the level of 1.2092. Experts call it a weak support level. Taking into account the current factors, analysts recommend focusing on short positions in the European currency.

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June 15. China again threatens all world trade

The partial closure of the Yantian terminal at the Chinese port of Shenzhen is putting the entire global container trade at risk. Experts note that the consequences of such a failure could be much more serious than the blocking of the Suez Canal by the ship Ever Given in March this year.

Recall that the blockage of the Suez Canal affected 55 thousand TEU (a unit of measurement for the capacity of freight vehicles) per day and lasted six days. Problems in Yantian can affect 25.5 thousand TEU per day, and they have been going on for more than two weeks.

The reason for the closure of the terminal was the outbreak of coronavirus in the Chinese province of Guangdong, where the port is located. In addition to Yantian, problems arose in the nearest terminals Shekou (Shenzhen city) and Nansha (Guangzhou). It is worth noting that these are the third and fifth largest ports in the world.

A large amount of cargo has already accumulated outside the port, some of which is being redirected to the ports of Nanshu, Shekou and Hong Kong, but their capacity is no longer enough. Complicating the situation is the fact that customs requirements differ in Chinese ports, which also limits the possibility of redirecting cargo flows.

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June 16. The Netherlands intends to create a hydrogen exchange

The Netherlands, home to one of the world's premier natural gas trading hubs, TTF, is planning a hydrogen exchange. The project has already been named HyXchange.

The national gas company Gasunie conducted some studies, according to which it became clear that certification is required for the practical organization of a hydrogen exchange, as well as the creation of a spot market (at the very beginning of the simulation), a price index, mechanisms for balancing physical volumes and storing hydrogen.

The hydrogen price index is supposed to take into account the method of its production and the degree of the achieved reduction of CO2 emissions.

The initiators of the initiative, represented by Gasunie, the country's port authorities and market participants, are confident that the H2 exchange can serve as a catalyst for the development of the climate-neutral hydrogen market. Experts see the transportation of hydrogen from different production methods (both «green» and other low-carbon H2) in the same network, as is the case with electricity or gas. At the same time, its added value for consumers will be preserved thanks to certification.