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Oil prices rise as China eases restrictions and OPEC+ keeps production flat

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(Bloomberg) — Oil rallied after OPEC+ kept oil production steady, sanctions on Russian crude kicked in, and China made more progress toward reopening.

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West Texas Intermediate rose above $80 a barrel after surging nearly 5% last week as Beijing eased strict virus restrictions that hampered energy consumption. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, agreed to keep production at current levels on Sunday, pausing them to assess volatile global market conditions.

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To further punish Moscow for invading Ukraine, the European Union, along with the G7, agreed to impose a cap at $60 a barrel on Russian crude, with most seaborne imports banned from Monday. The initiative aims to punish Russia financially, while keeping that country’s oil flowing to other countries. Russian Deputy Prime Minister Alexander Novak rejected the cap again, saying his country was ready to cut production if necessary.

Oil’s gains are the latest development in what has been an extraordinarily volatile year for the world’s most important commodity, as markets have been rattled by Europe’s biggest territorial struggle since World War Two and a blistering round of central bank tightening to combat hyperinflation. After hitting its lowest level since December early last week, US record prices have since rebounded.

RBC Capital Markets analysts including Helma Croft said: “It remains uncertain whether the plan will ensure a smooth flow of Russian barrels into Asian markets or if there is material disruption due to deliberate supply measures from Moscow or risk aversion by management.” international compliance. On a note.

Oil traders have focused in recent weeks on China’s rapidly shifting approach to dealing with Covid-19. After a rare round of protests, authorities are moving to ease restrictions, which is helping forecasts for demand for energy as well as other commodities. Major cities including Shanghai, Shenzhen and Guangzhou have eased restrictions in recent days, accelerating the shift toward reopening.

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The OPEC+ agreement came after an online meeting, which replaced what was initially supposed to be an in-person meeting at the group’s headquarters in Vienna. The Interministerial Monitoring Committee, which oversees implementation of production cuts, will meet again on February 1, according to delegates. Most analysts did not expect any change in supply policy in the weekend session.

A deal to cap the price of Russian crude oil was months in the making as the US expressed concern that an EU embargo on Russian oil and related insurance and financing services could lead to a devastating price hike. However, the agreed level is now about $10 higher than Russia’s major Ural score, suggesting its impact on those flows may be limited. But in Asia, the ceiling is lower than the price of Espoo crude, which is loaded from Russia’s Far East.

Elements, Bloomberg’s daily energy and commodities newsletter, is available now. Register here.

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MicroStrategy is at its lowest level since 2020 after the sales were revealed

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(Bloomberg) — Shares of MicroStrategy touched their lowest level since August 2020 after the enterprise software company, which in recent years has been known as the largest buyer of bitcoin, revealed its first sale of the token.

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The stock fell 1.1 percent to $136.63 on Thursday, down 75 percent this year. Bitcoin rose less than 1% to around $16,590 and is believed to have fallen 64% since the start of the year.

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In a filing on Wednesday, MicroStrategy said it acquired approximately 2,395 Bitcoin between the beginning of November and December 21 through its subsidiary MacroStrategy, and paid out approximately $42.8 million in cash. It then sold 704 of the tokens on Dec. 22 for a total of about $11.8 million, citing tax purposes, before buying another 810 of them two days later.

Matt Malley, chief market strategist for Miller Tabak + Co. Step down as CEO. This news means they don’t seem to want to do that anytime soon.”

Overall, MicroStrategy held about 132,500 bitcoins worth over $4 billion USD as of December 27th. The company paid an average purchase price of $30,397 per bitcoin.

“Given MicroStrategy’s $2.4 billion in leverage, we believe the company may have a lot of leverage over Bitcoin, and may face some liquidity risk,” Jefferies analyst Brent Thiel wrote in a note on Wednesday. Thill has an “underperform” rating on the stock and a price target of $110.

Over the years of the pandemic, MicroStrategy has become well known for its Bitcoin takeovers, largely led by Saylor. Earlier this year, Saylor stepped down from that role and now serves as CEO at the company and continues to lead its bitcoin strategy.

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MicroStrategy was trading around $120 before Saylor first announced the company’s Bitcoin purchases in 2020. The stock reached an all-time high of $1,315 in February 2021.

(Updates to include the stock’s closing price in the second paragraph.)

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Bankman-Fried May File Petition in New York Federal Court Next Week Before Judge Louis Kaplan By Cointelegraph

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Former FTX CEO Sam Bankman-Fried is set to appear in court on the afternoon of January 3 to enter a lawsuit over two counts of wire fraud and six counts of conspiracy against him related to the collapse of cryptocurrency exchange FTX, according to Reuters. mentioned on December 28, citing court records. Bankman-Fried will appear before District Judge Lewis Kaplan in Manhattan.

Judge Kaplan was appointed to hear the case on December 27 after the original judge in the case, Ronnie Abrams, Resigned herself because of connections between FTX and the law firm Davis Polk & Wardwell, where her husband is a partner. The company provided advisory services to FTX in 2021.