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Market News Crude oil trading reminder: EU sanctions on Russian oil products lead to tight supply, rising demand helps oil prices hit a two-month high
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Crude oil trading reminder: EU sanctions on Russian oil products lead to tight supply, rising demand helps oil prices hit a two-month high
2022-05-31 07:20:11
During the Asian session on Tuesday (May 31), U.S. oil continued to rise, hitting its highest level since March 10 at $117.69 per barrel; due to the relaxation of the epidemic control, the EU summit sanctioned Russian oil products, and tight supply helped oil prices rise.
In the days, the focus will be on US President Biden's meeting with Federal Reserve Chairman Powell to discuss the US and global economic situation, the US Chicago PMI in May; due to the US Memorial Day holiday, the API data originally released at 4:30 on Wednesday was delayed to 4:30 on Thursday , the EIA data originally released at 23:00 on Wednesday was delayed to 23:00 on Thursday.
[EU Summit Sanctions Russian Petroleum Products]
EU leaders will agree at a summit later in the day that the sanctions package being prepared should include an embargo on Russian oil imports as punishment for Russia's invasion of Ukraine, but an exemption for crude oil transported by pipeline. But with no agreement on all the details of the oil embargo, leaders will save a final agreement on the package for later.
"The European Council has agreed that the sixth set of sanctions against Russia will cover crude oil shipments from Russia to member states, as well as petroleum products, but not crude oil shipments via pipelines for the time being," the latest draft conclusion said.
"The European Council therefore urges that it be finalized and adopted without delay, ensuring a level playing field and a level playing field in the EU single market and solidarity among member states in the event of sudden supply disruptions," the draft said. The EU's 27 member states will "solve as soon as possible the issue of temporary exceptions for the delivery of crude oil through pipelines".
The Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia (OPEC+) will reject Western calls to increase output at a meeting on Thursday. Six OPEC+ sources told Reuters they would stick to plans to increase output by 432,000 bpd in July. This further highlights the tight market supply.
Daniel Ghali, senior commodities analyst at TD Securities, said that in the last month, Europe has been discussing an embargo on Russian oil, and the market is increasingly viewing additional sanctions as a risk. A further ban on Russian oil will tighten the market even further ahead of peak summer demand in Europe and the United States, with rising demand for gasoline, diesel and jet fuel.
According to Adam Button, an analyst at financial website Forexlive, oil prices have continued to rebound in the past six weeks. Although U.S. crude oil has only risen from $102/barrel to $117/barrel, the background is that the United States releases 1 million barrels of oil from the Strategic Petroleum Reserve (SPR) per day. , and the troubled global economy. Despite multiple unfavorable factors, oil prices still rebounded, which is almost unprecedented, indicating that the oil market is indeed facing a supply shortage, and Russia's daily supply may be reduced by 3 million barrels per day. From a technical point of view, once the US crude oil breaks through the high of US$116.61/barrel at the end of March, it will look at US$130/barrel. With the recovery of the Asian economy, the demand for crude oil will surely strengthen.
European Commission President von der Leyen: The ban on Russian oil does not include oil through pipelines, which allows dependent countries (almost only Hungary) to continue to import; Germany and Poland will stop importing oil through the Druzhba pipeline by the end of this year.
[Gazprom suspends gas supply to Dutch gas company]
Russia will stop supplying pipeline gas to the Netherlands, Denmark may be next. GasTerra BV said gas supplies will stop on Tuesday after the company rejected new payment terms imposed by Gazprom and Russian President Vladimir Putin. Denmark's Orsted A/S said it was also reluctant to compromise and was preparing for a supply cut.
Russia has implemented new payment terms for European companies, which include opening ruble accounts with Gazprombank. Traders have been closely watching payment disputes. Gazprom has stopped supplying gas to Poland, Bulgaria and Finland due to payment problems.
"GasTerra will not agree to Gazprom's payment request," the company said in a statement on its website, "because there is a risk of violating EU sanctions and the required payment method carries too many financial and operational risks."
European countries are divided over how to handle Moscow's demands, and utilities have responded differently to the challenge. Major buyers such as Italy's Eni SpA and Germany's Uniper SE have said they have found a payment solution and expect supplies to continue.
Orsted's payment deadline is Tuesday, and the company will continue to pay in euros. The company said, "Gazprom may stop supplying natural gas to Orsted." After the news of the natural gas supply cut, Dutch natural gas futures for next month turned from losses to gains, rising 2.2% at one point. It was then flat at around 86.9 euros per MWh.
Denmark and the Netherlands also rely on domestic production for supply, but domestic production has been declining for several years and is not enough to fully meet consumption needs.
On May 30, local time, Gazprom announced that it has notified the Dutch GasTerra that it will suspend gas supply from May 31 because it has not yet received the payment owed by the Dutch company GasTerra in April.
[Russian troops enter the edge of Severo Donetsk and launch a fierce attack]
Ukrainian and Russian troops fought on the outskirts of Severo Donetsk on Monday. It was the last city Kyiv controlled in Luhansk province and the focal point of Moscow's offensive in eastern Ukraine.
Russian shelling has razed much of Severo Donetsk, but Ukrainian defenses have slowed broader Russian operations across the Donbass. Luhansk Governor Serhiy Gaidai said that Russian troops had entered the southeastern and northeastern edges of Severo Donetsk.
"They're using the same tactics over and over again. Shelling for hours, three hours, four hours, five hours, and then attacking," he said. "Those who attack will die, and then shelling and attacking will happen again. One after another, one after another, until they have a breakthrough somewhere." He also said the suburban air "was filled with the horrific smell of death" as the temperature rose.
[71 new cases of monkeypox in England]
The UK Health Security Agency (UKHSA) said on May 30, local time, that 71 more cases of monkeypox were found in England, UK. Since May 7, there have been 179 confirmed cases of monkeypox in the UK. The UK Health Security Agency said the risk of population transmission "remains low" because the virus is spread through close physical contact. However, the agency warns that the virus can live on surfaces such as sheets or towels.
[Spain reports 30 cases of acute hepatitis of unknown etiology in children]
On May 30, local time, a report released by the Spanish Ministry of Health showed that from January 1 to May 26, 2022, a total of 30 cases of acute hepatitis of unknown cause in children were found in 10 regions, including 24 cases. The age was under 10 years, and the average age of the cases was 6.1 years. The Spanish Ministry of Health is currently conducting research on this. According to the report, 20 cases have been cured and discharged, and 1 case requires liver transplantation. To date, no epidemiological link has been identified among acute hepatitis cases among children in the country.
[Unexplained hepatitis A outbreak in many states in the United States]
According to the "USA Today" website and many other US media reports, the Hepatitis A outbreak has occurred in many states in the United States recently. Two brands of organic strawberries were investigated and believed to be related to the outbreak.
According to the Food and Drug Administration, a total of 17 cases of hepatitis A have been reported in this outbreak, including 15 in California, 1 in Minnesota, and 1 in North Dakota, of which 12 required hospitalization. The patient's onset dates were between March 28 and April 30, and the outbreak may be related to two brands of fresh organic strawberries, FreshKampo and HEB, which are sold at multiple retailers across the United States.
[Thailand found a connecting foreign passenger infected with monkeypox virus]
Officials from the Department of Disease Control and Prevention of the Ministry of Health of Thailand revealed on May 30 that a foreign passenger who had transited through Bangkok International Airport a few days ago was diagnosed with monkeypox virus.
[WHO assesses the global public health risk of monkeypox as moderate]
On May 29, local time, WHO issued a disease information bulletin. From May 13 to 26, 23 non-monkeypox-endemic countries and regions have reported 257 confirmed cases of monkeypox to WHO, and 257 confirmed cases of monkeypox have been reported to WHO. About 120 suspected cases.
WHO expects more cases of monkeypox to be detected as surveillance is expanded. The virus may have been circulating undetected for weeks or more, with widespread human-to-human transmission. WHO assesses the global public health risk of monkeypox as moderate.
In general, the epidemic risk control has eased and demand has increased; EU sanctions on Russian crude oil products have made supply tight, and geopolitical tensions have escalated.
At 07:00 GMT+8, U.S. crude oil is now at $117.45 a barrel.
In the days, the focus will be on US President Biden's meeting with Federal Reserve Chairman Powell to discuss the US and global economic situation, the US Chicago PMI in May; due to the US Memorial Day holiday, the API data originally released at 4:30 on Wednesday was delayed to 4:30 on Thursday , the EIA data originally released at 23:00 on Wednesday was delayed to 23:00 on Thursday.
Bullish factors affecting oil prices
[EU Summit Sanctions Russian Petroleum Products]
EU leaders will agree at a summit later in the day that the sanctions package being prepared should include an embargo on Russian oil imports as punishment for Russia's invasion of Ukraine, but an exemption for crude oil transported by pipeline. But with no agreement on all the details of the oil embargo, leaders will save a final agreement on the package for later.
"The European Council has agreed that the sixth set of sanctions against Russia will cover crude oil shipments from Russia to member states, as well as petroleum products, but not crude oil shipments via pipelines for the time being," the latest draft conclusion said.
"The European Council therefore urges that it be finalized and adopted without delay, ensuring a level playing field and a level playing field in the EU single market and solidarity among member states in the event of sudden supply disruptions," the draft said. The EU's 27 member states will "solve as soon as possible the issue of temporary exceptions for the delivery of crude oil through pipelines".
The Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia (OPEC+) will reject Western calls to increase output at a meeting on Thursday. Six OPEC+ sources told Reuters they would stick to plans to increase output by 432,000 bpd in July. This further highlights the tight market supply.
Daniel Ghali, senior commodities analyst at TD Securities, said that in the last month, Europe has been discussing an embargo on Russian oil, and the market is increasingly viewing additional sanctions as a risk. A further ban on Russian oil will tighten the market even further ahead of peak summer demand in Europe and the United States, with rising demand for gasoline, diesel and jet fuel.
According to Adam Button, an analyst at financial website Forexlive, oil prices have continued to rebound in the past six weeks. Although U.S. crude oil has only risen from $102/barrel to $117/barrel, the background is that the United States releases 1 million barrels of oil from the Strategic Petroleum Reserve (SPR) per day. , and the troubled global economy. Despite multiple unfavorable factors, oil prices still rebounded, which is almost unprecedented, indicating that the oil market is indeed facing a supply shortage, and Russia's daily supply may be reduced by 3 million barrels per day. From a technical point of view, once the US crude oil breaks through the high of US$116.61/barrel at the end of March, it will look at US$130/barrel. With the recovery of the Asian economy, the demand for crude oil will surely strengthen.
European Commission President von der Leyen: The ban on Russian oil does not include oil through pipelines, which allows dependent countries (almost only Hungary) to continue to import; Germany and Poland will stop importing oil through the Druzhba pipeline by the end of this year.
[Gazprom suspends gas supply to Dutch gas company]
Russia will stop supplying pipeline gas to the Netherlands, Denmark may be next. GasTerra BV said gas supplies will stop on Tuesday after the company rejected new payment terms imposed by Gazprom and Russian President Vladimir Putin. Denmark's Orsted A/S said it was also reluctant to compromise and was preparing for a supply cut.
Russia has implemented new payment terms for European companies, which include opening ruble accounts with Gazprombank. Traders have been closely watching payment disputes. Gazprom has stopped supplying gas to Poland, Bulgaria and Finland due to payment problems.
"GasTerra will not agree to Gazprom's payment request," the company said in a statement on its website, "because there is a risk of violating EU sanctions and the required payment method carries too many financial and operational risks."
European countries are divided over how to handle Moscow's demands, and utilities have responded differently to the challenge. Major buyers such as Italy's Eni SpA and Germany's Uniper SE have said they have found a payment solution and expect supplies to continue.
Orsted's payment deadline is Tuesday, and the company will continue to pay in euros. The company said, "Gazprom may stop supplying natural gas to Orsted." After the news of the natural gas supply cut, Dutch natural gas futures for next month turned from losses to gains, rising 2.2% at one point. It was then flat at around 86.9 euros per MWh.
Denmark and the Netherlands also rely on domestic production for supply, but domestic production has been declining for several years and is not enough to fully meet consumption needs.
On May 30, local time, Gazprom announced that it has notified the Dutch GasTerra that it will suspend gas supply from May 31 because it has not yet received the payment owed by the Dutch company GasTerra in April.
[Russian troops enter the edge of Severo Donetsk and launch a fierce attack]
Ukrainian and Russian troops fought on the outskirts of Severo Donetsk on Monday. It was the last city Kyiv controlled in Luhansk province and the focal point of Moscow's offensive in eastern Ukraine.
Russian shelling has razed much of Severo Donetsk, but Ukrainian defenses have slowed broader Russian operations across the Donbass. Luhansk Governor Serhiy Gaidai said that Russian troops had entered the southeastern and northeastern edges of Severo Donetsk.
"They're using the same tactics over and over again. Shelling for hours, three hours, four hours, five hours, and then attacking," he said. "Those who attack will die, and then shelling and attacking will happen again. One after another, one after another, until they have a breakthrough somewhere." He also said the suburban air "was filled with the horrific smell of death" as the temperature rose.
Negative factors affecting oil prices
[71 new cases of monkeypox in England]
The UK Health Security Agency (UKHSA) said on May 30, local time, that 71 more cases of monkeypox were found in England, UK. Since May 7, there have been 179 confirmed cases of monkeypox in the UK. The UK Health Security Agency said the risk of population transmission "remains low" because the virus is spread through close physical contact. However, the agency warns that the virus can live on surfaces such as sheets or towels.
[Spain reports 30 cases of acute hepatitis of unknown etiology in children]
On May 30, local time, a report released by the Spanish Ministry of Health showed that from January 1 to May 26, 2022, a total of 30 cases of acute hepatitis of unknown cause in children were found in 10 regions, including 24 cases. The age was under 10 years, and the average age of the cases was 6.1 years. The Spanish Ministry of Health is currently conducting research on this. According to the report, 20 cases have been cured and discharged, and 1 case requires liver transplantation. To date, no epidemiological link has been identified among acute hepatitis cases among children in the country.
[Unexplained hepatitis A outbreak in many states in the United States]
According to the "USA Today" website and many other US media reports, the Hepatitis A outbreak has occurred in many states in the United States recently. Two brands of organic strawberries were investigated and believed to be related to the outbreak.
According to the Food and Drug Administration, a total of 17 cases of hepatitis A have been reported in this outbreak, including 15 in California, 1 in Minnesota, and 1 in North Dakota, of which 12 required hospitalization. The patient's onset dates were between March 28 and April 30, and the outbreak may be related to two brands of fresh organic strawberries, FreshKampo and HEB, which are sold at multiple retailers across the United States.
[Thailand found a connecting foreign passenger infected with monkeypox virus]
Officials from the Department of Disease Control and Prevention of the Ministry of Health of Thailand revealed on May 30 that a foreign passenger who had transited through Bangkok International Airport a few days ago was diagnosed with monkeypox virus.
[WHO assesses the global public health risk of monkeypox as moderate]
On May 29, local time, WHO issued a disease information bulletin. From May 13 to 26, 23 non-monkeypox-endemic countries and regions have reported 257 confirmed cases of monkeypox to WHO, and 257 confirmed cases of monkeypox have been reported to WHO. About 120 suspected cases.
WHO expects more cases of monkeypox to be detected as surveillance is expanded. The virus may have been circulating undetected for weeks or more, with widespread human-to-human transmission. WHO assesses the global public health risk of monkeypox as moderate.
In general, the epidemic risk control has eased and demand has increased; EU sanctions on Russian crude oil products have made supply tight, and geopolitical tensions have escalated.
At 07:00 GMT+8, U.S. crude oil is now at $117.45 a barrel.
Risk Warning: Trading financial instruments involves significant risk and may result in the loss of your invested capital. Please ensure you fully understand the risks and seek independent professional advice if necessary. This article does not constitute investment advice or a trading recommendation. Past performance is not indicative of future results.
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