OIL
In recent days, we've seen an increase in oil prices. You might be wondering, Why did this happen? Well, there are three main reasons behind this surge:
Damage to the CPC pipeline in Russia: A drone strike on a pipeline transporting oil from Kazakhstan reduced the oil flow. It's estimated that this supply drop could reach 380,000 barrels per day for two months, naturally pushing oil prices higher.
Cold weather in the US and production decline: In North Dakota, freezing temperatures have reduced production by 150,000 barrels per day while slightly increasing demand. When US production drops, global oil prices tend to rise as market supply tightens.
Uncertainty in Ukraine negotiations: The market is closely watching the talks between the US and Russia. While a deal on Ukraine could increase Russian oil supply, such an agreement doesn’t seem likely anytime soon. As a result, uncertainty remains, influencing oil prices.
WHAT TO EXPECT THIS WEEK.
USA:
• On Friday, the PCE index (January) will be released, showing less pressure than the CPI.
• Expectations remain that there will be no rate cuts before the fall.
• Consumer confidence data, GDP, durable goods, and weekly jobless claims are also due.
• Government bond auctions (2, 5, 7 years).
Canada:
• December & Q4 GDP data will be released.
• Supported by strong retail sales, although concerns about tariffs persist.
Europe – Germany:
• The election results (Feb 23) will test political stability.
• Inflation indicators, business and consumer sentiment data, as well as bond auctions in Germany, Belgium, and Italy.
Switzerland:
• On Thursday, Q4 GDP data will be released.
United Kingdom:
• A light week with a focus on housing prices (Nationwide) and government bond auctions.
Japan:
• On Friday, consumer price data for Tokyo, industrial production, and retail sales will be released.
• Outlook for additional rate hikes, with the BOJ supporting the market through JGB purchases.
Australia:
• Monthly inflation data, construction indicators, and investment figures dominate the week.
• A speech by the RBA will provide clues about future monetary policy.
Posted Using INLEO