Oil traders are putting Beijing lockdown fears in the rearview mirror and instead are focusing on more stimulus coming from China. They are also questioning whether a full lockdown of Beijing will occur.
Oil prices rebounded big time after the Chinese government failed to impose a lockdown on Beijing and promised more stimulus for people impacted by previous shutdowns.
More stimulus from China could mean more oil demand, and that is a sign of hope in a market that has been concerned about slowing demand not only in China but around the world. Rising interest rates and recession fears have the market trying to balance worries about short-term tight supplies versus the possibility of a future recession.
We’re seeing that being played out in the curve as a front end of the curve of a lot of the petroleum products. It’s finding support where the back end is lagging. Diesel shortages are extremely acute.
We see quite the spread between the front-month diesel contract and the second-month diesel contract. More sanctions on Russia could also impact. We also get the American Petroleum Institute report today, which will focus dramatically on supply.
Kings of supplies are also still very tight, and we see a little bit of a squeeze play in the front end of the curve buyers are starting to buy, and it’s getting difficult for hedgers to hatch Natural gas is back on a tear with winter weather and exports maxed out. Reuters is reporting that April 26 (Reuters) – The Kremlin on Tuesday said Gazprom (LON:GAZPq) was implementing the presidential decree on enforcing payment for gas supplies in roubles without providing further clarification when asked about the European Commission’s guidance on Russia’s plan.
The European Commission has said that European companies will need to fulfill extra requirements, such as a statement they consider their contractual obligations to be complete once they have deposited non-Russian currencies. Kremlin spokesman Dmitry Peskov told a daily conference call with reporters:
“All the contacts with buyers of gas have been made via Gazprom, so Gazprom will publish information on the results of the talks.”
Gazprom declined to comment. A source familiar with the talks with the gas buyers who declined to be named said there was no clarity on how the scheme would be implemented, but work continued.
Russian President Vladimir Putin has demanded that countries he terms “unfriendly” agree to implement the scheme under which they would open accounts at Gazprom bank and make payments in euros or dollars that would be converted into roubles. Peskov has said payments for deliveries that took place after Putin’s decree took effect were expected in May.
Russia course, for their part, wants to threaten to use nuclear weapons but at the same time convinced the world that they are a reliable energy supplier.