Nov 7
VOT Research Report
Analytics and Considerations
Sunday night, the oil market was hit hard, but it came back because it was unclear whether China would lift some of its COVID-19 restrictions. China has been the one element of global demand that has not been present .There is no doubt that China’s zero COVID policy has contributed to some of the declines in global demand.
In hindsight, this is probably a good thing because we probably wouldn’t have been able to meet global demand if China had kept its economy open. Xi Jinping, president of China, is currently organizing a trip to Saudi Arabia for the second week of December. Naturally, in one of his numerous foreign policy blunders, Biden has shunned Saudi Arabia, and Saudi Arabia is seeking new partners worldwide.
As it appeared that China was easing some of its restrictions on travelers entering the country, the markets shot up on Friday..
However, after Reuters reported: “Over the weekend, the markets became frazzled. “Health officials stated on Saturday that China will continue its “dynamic-clearing” approach to COVID-19 cases as soon as they arise, adding that measures must be implemented more precisely and meet the needs of vulnerable individuals.
They tell a different story when you look at Chinese oil imports. Oil imports from China skyrocketed.43.14 million tons were added year over year for the first time since my posting. China’s sudden increase in oil imports must have a justification. We would speculate that China is getting ready for winter or, at the very least, for some kind of economic reopening.
It doesn’t really matter which it is. The problem is that global oil supplies are still extremely limited, leaving no room for error. That circumstance will become even more precarious in the event of increased demand from China. This is taking place despite the fact that China’s exports decreased last month due to supply chain issues and a slowing global economy.
The green energy movement is a part of the reason the world is in such a dangerous situation. One of the reasons why the world is in such a precarious position is the COP 27 summit of world leaders on climate change. By encouraging underinvestment in fossil fuels and climate alarmism, the green energy movement makes the world more vulnerable.
The world is in the most dangerous situation as a result of this global conference, which is being led by a group of global elites. We now know the real reason for this climate conference, which will be held in Egypt .It’s not about saving the planet; rather, it’s about shifting wealth from wealthy to poorer nations .Poor nations are requesting climate compensation at this meeting. They want compensation from wealthy nations for their previous polluting practices.
We observe a trend toward global socialism. Communism generally makes a shortage of merchandise. Inflation occurs when there is a lack of goods, which hurts the poor and middle class They claim that they must relocate in order to save the planet, but does anyone really want to live on a planet where the global elites become wealthy while the poor are left to freeze?
Global instability has also been caused by the summit leader policies. Countries have returned to burning dirty and dirtier fuel as a result of Russia’s policies, which use its energy dominance over Europe as a political weapon. In the midst of record-breaking prices, the interruption of a major amount of Russia’s gas supply, and a liquidity crisis in the energy market, the European Union has been discreetly savoring a constant reduction in gas and electricity use this year.
Nevertheless, there is no reason to rejoice because businesses aren’t merely using less energy.
consumption and carrying on as usual. They are downsizing, moving, or closing factories. It’s possible that Europe is on its way to deindustrialization. Anyone paying attention to the indicators can now see that the European Union is on its way to a recession. The most recent manufacturing activity in the Eurozone fell to its lowest level since May 2020.If we turn our attention to the United States, we can find warnings about diesel fuel shortages. Some markets appear to have seen outright panic buying, and other dealers are advising consumers to prepare for shortages this winter.
By releasing oil from the Strategic Petroleum Reserve, U.S. President Joe Biden has attempted to lower prices for political reasons, which has discouraged investment. Now, Biden is harshly criticizing oil companies and threatening windfall profit taxes on energy companies. Supplies will be further restricted as a result. Crude oil supplies should decrease by approximately 1,000,000 barrels even with releases from the Strategic Petroleum Reserve .Additionally, inventories of gasoline and distillate should decrease by 2,000,000 barrels and 3,000,000 barrels, respectively. This week, we anticipate steady refinery runs.
On Sunday night, the price of natural gas skyrocketed. The weather conditions estimate turned freezing for the finish of November. Since the weather will determine whether prices are extremely high or extremely low, it is evident that this market is highly volatile. Even though inventory levels have increased significantly over the past few weeks, supplies are still relatively scarce. Natural gas prices should close in on all-time highs this winter if we have a cold winter.
