Oil begins to gain bids with the once-in-a-century superstorm batters the U.S. Putin will ban oil exports to G7 countries in early 2023, while U.S. oil stocks continue to fall to three decade lows.
After the G7 oil cap at $60 for Russian oil, Putin has done what a lot of oil analysts suspected, he has banned exports, beginning February 1st 2023, to countries that agreed to the oil cap. Which in turn has put extra demand on Middle Eastern oil and its futures price, moving up from December 9th low at $70, on the back of U.S. superstorm (worst in a century) and recent Energy Information Administration (EIA) weekly report on U.S. oil stocks (Chart 1), that showed a fall of 5.89 million barrels. Which was probably the terrible misjudgment of the Biden administration early/mid 2022 drawing down of oil reserves, in lieu of end year energy/heating demands with the extreme cold weather affecting most of America.
Hence the price rallying to $78 and may close out for 2022 at $80, please refer to Chart 2.
Also, is the 10 YR breakeven rate, overlaid with the WTI oil price which is showing inflation expectations moving upwards, correlating with October 2022 highs at 2.26%. As inflation begins to incline once again, when a very sight decline occurred in global CPI's , which was due to the decline in the oil price mid/end 2022.
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All market commentary: chiasmusmagazine.blogspot.com/search?q=market
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