"Tidbits From TNT" Tuesday Morning 3-8-2022

Mar 8

TNT:

Tishwash: Crazy rise in oil and gold prices.. Brent near 130 dollars a barrel

Global markets started the week with crazy rises in oil and gold prices with the escalation of the Russian-Ukrainian war, and fears of imposing sanctions on Russian oil exports by the West.

Brent crude prices jumped by more than 9% at the opening session of Monday, March 7, 2022, exceeding the level of $130 a barrel, before futures contracts for April delivery settled near $129, an increase of nearly $10 from the last close last Friday.

As for US oil, it also made a jump of about $10 from its last close on Friday, and West Texas Intermediate crude rose about 9% above the level of $125 a barrel.

Gold is now less than $15 below $2,000 per ounce.

Gold is considered a safe haven and a hedging tool for investors in times of crisis.

The International Energy Agency announced that Ukraine had reported that Russian forces had taken control of the Zaporozhye plant, and that Russian forces had changed mobile phone networks and Internet connections, and thus the Ukrainian authorities were no longer able to acquire information through traditional channels.

For his part, US Secretary of State, Anthony Blinken, announced that the United States is in the midst of discussions with allies in Europe about imposing a ban on European countries' imports of Russian oil.

And oil prices recorded big jumps during the past week and the first of March, the highest in 10 to 14 years.

Brent crude rose by about 20.5% to close above levels of $ 118 a barrel, and West Texas crude also rose by more than 25% to close above levels of $ 115 a barrel.

The prices of Iraqi oil (Basra Heavy Crude) rose, surpassing the $100 per barrel barrier by dawn on Saturday, March 5, 2022, Baghdad time.

Basra Light Crude touched $104 a barrel two days ago, before declining by 4%. link

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Tishwash: Oil traders expect Brent crude to reach $200 a barrel this month

Traders are buying options contracts, expecting that oil prices will rise further after reaching their highest level since 2008, while some have placed low-cost bets that futures contracts will rise above $200 before the end of March.

Prices of "call options" contracts rose to higher prices for crude oil on Monday, as the market assessed the possibility of a supply ban from Russia, one of the world's largest exporters. At least 200 contracts of the May Brent futures call option were traded at $200 a barrel strike price on Monday, according to ICE Futures Europe data. These options contracts expire on March 28, three days before the contract is settled. Its purchase price jumped 152% to $2.39 a barrel.

Since Friday, the price of the call option contract at the price of $150 per barrel of the June Brent contract has doubled, while the cost of the call option contract has jumped at the price of $180 by 110%. The Brent contract to its nearest month maturity in May rose significantly early Monday, as traders panicked over discussions of a Russian crude embargo, as well as amid Libyan supply disruptions and delays in expected progress in Iran nuclear talks.

Last week, JPMorgan said that Brent crude could reach $185 a barrel by the end of this year if Russian supplies continue to be disrupted, while the Australia and New Zealand Banking Group Ltd. expected that about 5 million barrels per day of pipelines and oil supplies would be affected. seaborne imposition of new penalties.

Russia is the third largest oil producer in the world after the United States and Saudi Arabia, and is a member of the "OPEC +" oil alliance. It exported 7.8 million barrels per day of crude oil, condensate and petroleum products in December of last year, according to the International Energy Agency, with major fuels such as diesel, fuel oil, gasoline, and naphtha being exported to buyers in Europe, the United States and Asia link

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Tishwash: Al-Kazemi: Iraq is going through great challenges, and the reason is corruption and mismanagement link

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Tishwash: International report: Rising oil prices support Iraq's hard currency reserves

Translation: Hamed Ahmed

An international report spoke of positive returns from the rise in oil prices on Iraq, stressing its contribution to increasing hard currency reserves, but returned to clarify that there are fears that this rise will not continue for a long time as it is linked to the war between Russia and Ukraine.

And the international economic expert, Ahmed Al-Tabbajli, stated in a report published on the American (Iraq Business News) website and translated (Al-Mada), that “the rise in the oil market index will have a promising developmental return for Iraq’s economy and financial position, leading to positive stability of the country’s currency over years, which will translate In return, he increased his hard currency reserves.

The report added, "The oil market, according to the RSISX USD Index, achieved an increase in prices between 4.5% to 8.8% during this year, which means an improvement in Iraq's economy over the past two years with promising and distinct development indicators."

Tabaqali says in his report that "Iraqi oil sales for the fifth month in a row are steadily rising amid a continuous increase in oil prices."

He pointed out, "The country's escalating financial efficiency as a result of high oil prices in exchange for increased sales will have significant positive effects on both the Iraqi economy and market justice, taking into account the centrality of the country's economy that depends on government spending from oil revenues."

However, the economist says, according to the report, that “there is a great deal of fear regarding the current oil prices, as it is likely that they will not stabilize for a long time on this ceiling, and this is related to the volatile geopolitical landscape of the consequences of the Russian invasion of Ukraine, which will have important returns on the principle of supply and demand.” on oil.”

With regard to the demand side, the report considered, “The limited obstacles and disruptions caused by the new mutant Omicron to economic activity at the world level since its appearance, have strengthened the promised market expectations that demand for oil will return to rates before the emergence of the Corona Covid 19 virus in the year 2019 and there is no reason, at least for the time being, that these expectations might change significantly following the invasion of Ukraine.”

The report stressed, “The expectations of supply and supply for the oil market will return to their rates that were before the emergence of the Corona Virus Covid-19 pandemic, and it is expected that they will be reconsidered in light of the pressures that the OPEC Plus group will be exposed to, amid the new change that has occurred in the world.”

He stressed, "The plans of OPEC Plus, before the events that led to the current crisis, were to be completely free from the production cuts agreed upon in April 2020 by September 2022."

The expert, Tabaqjali, finds, “The situation may worsen, given the scope of the expanded sanctions imposed on Russia, which will negatively affect its oil production and the production of many members of the OPEC Plus group allied with Russia, and consequently the supply will be more restricted than expected, and perhaps Saudi Arabia will increase its production.”

And the report stated, "Oil prices in relation to supply and demand and what they mean for the Iraqi economy will be more clear for the aspirations of 2022 and their positive effects on the country's economic situation for the current government and future governments, and this has an impact on the accumulation of the financial surplus."

He added, "Oil prices had recently reached their highest price since 2014, and the Iraqi Oil Minister, Ihsan Abdul-Jabbar, expected earlier this month that oil prices would exceed $100 per barrel in the first or second quarter of this year." With global stocks falling to their lowest level.

The report concluded, “Abdul-Jabbar stated that the Iraqi government’s budget for 2022 should be based on an oil price ranging between 55 and 60 dollars, especially since the average exports will reach 3.4 million barrels per day, including Kurdistan region oil.”

An official statement of the Ministry of Oil had indicated that Iraq achieved the highest level of oil sales in eight years last month, at a rate of more than 3.3 million barrels per day, while imports during the same month amounted to 8.5 million dollars. link

Mot .... Just Saying!! ~~~