Oil hits 10-month low
Brent crude has now slumped to its lowest since January, down 5% at $83.24 per barrel.
The selloff accelerated following the news that Saudi Arabia and other OPEC oil producers are reportedly discussing an output increase. That would keep energy supplies runnning even as the G7 and the European Union try to curb Russian supplies.
Such a sharp drop, if it holds, could help ease inflationary pressures – helping families and businesses this winter.
Key events
Summary
Time to wrap up – here are today’s main stories:
Brent crude oil prices are now at their lowest level since before the Ukraine war began.
Brent crude currently trading nearly 13% below where it was right before Russia invaded Ukraine (marked by orange line)
[Past performance is no guarantee of future results] pic.twitter.com/AILPLHNnRj— Liz Ann Sonders (@LizAnnSonders) November 21, 2022
Oil Spill !
– Oil down 5%
– WSJ: OPEC+ discussing an increase of up to 500k bpd ahead of Dec 4 decision
– Comes as a surprise, given OPEC’s preference this yr to cut supply
– Dec 5 is the deadline when EU has said it would embargo Russian oil & G7 plans to launch a price cap
— Prashant Nair (@_prashantnair) November 21, 2022
Today’s talk of an Opec production increase has emerged after US president Joe Biden’s administration told a federal court judge that Saudi Crown Prince Mohammed bin Salman should have sovereign immunity from a U.S. federal lawsuit related to the killing of Saudi journalist Jamal Khashoggi.
In a filing released on late on Thursday night, the Biden administration said the crown prince’s recent promotion to the role of prime minister meant that he was “the sitting head of government and, accordingly, immune” from the lawsuit.
The immunity decision amounted to a concession to Prince Mohammed, bolstering his standing as the kingdom’s de facto ruler after the Biden administration tried for months to isolate him, the Wall Street Journal said.
US crude has also fallen over 4%, on hopes that Opec might decide to turn their production taps up again.
Oil hits 10-month low
Brent crude has now slumped to its lowest since January, down 5% at $83.24 per barrel.
The selloff accelerated following the news that Saudi Arabia and other OPEC oil producers are reportedly discussing an output increase. That would keep energy supplies runnning even as the G7 and the European Union try to curb Russian supplies.
Such a sharp drop, if it holds, could help ease inflationary pressures – helping families and businesses this winter.
Disney shares surge 8%, adding $14bn to value
Shares in entertainment giant Disney have surged over 8% at the start of New York trading.
Disney’s stock has hit $99.47, up from $91.80 on Friday night, as investors welcome the return of former boss Bob Iger as CEO again.
That adds around $14bn to Disney’s value, lifting its market capitalisation from $167bn to over $180bn.
As covered earlier, traders are hopeful that Iger can set a “strategic direction for renewed growth”, as Disney’s board pledged as they ousted Bob Chapek after less than three years.
My colleague Jasper Jolly writes:
Disney highlighted a fivefold market value increase under Iger’s previous leadership. The company said Iger had a “mandate from the board to set the strategic direction for renewed growth”, while also looking once more for a long-term successor.
Under Iger, Disney made a series of big acquisitions, including the Marvel film franchise, the Pixar animation studio and the Star Wars film franchise.
WSJ: Saudi Arabia eyes OPEC+ production increase
The oil price is falling sharply, on reports that Saudi Arabia is considering whether the Opec+ group should increase crude production.
According to the Wall Street Journal, an increase of up to 500,000 barrels per day is being discussed by Saudi Arabia and other OPEC oil producers.
Such a move would partly reduce the 2m barrel-per-day cut which Opec and its allies signed off in October, and has sent Brent crude to a near eight-week low.
If the cartel now lifts production, it could help heal a rift with the Biden administration and keep energy flowing
Opec members are due to meet on 4th December – a day before the European Union has said it would impose an embargo on Russian oil, and the Group of Seven wealthy nations’ plans to launch a price cap on Russian crude sales.
Here’s the full story:
Brent crude has now shed around 4% to $84.27 per barrel, a drop of over $3 per barrel, the lowest since 27 September.
Just in: Inflation has prompted the Bank of Israel to raise interest rates.
Israel’s central bank raised its benchmark rate by half a point, the sixth rise in a row, to 3.25% from 2.75%.
Today’s rise came after inflation rose to 5.1% in October, close to a 14-year high.
Israel raises interest rates by 50 basis points to 3.25%.
— Rufas Kamau ⚡ (@RufasKe) November 21, 2022
US economic activity slowed, according to the latest data from the Federal Reserve Bank of Chicago.
The Chicago Fed’s National Activity Index fell into negative territory in October, coming in at -0.05, down from 0.17 in September.
That indicates that US growth was below trend.
China and Qatar signs 27-year LNG deal
Important energy news….China and Qatar have sealed one of the biggest-ever liquified natural gas deals.
QatarEnergy has signed a 27-year deal to supply China’s Sinopec with liquefied natural gas (LNG).
It’s the longest such LNG agreement so far, according to Reuters, as volatile markets drive buyers to seek long-term deals.
It will also put pressure on Europe, points out Bloomberg’s energy reporter Stephen Stapczynski.
Qatar and China sign one of the BIGGEST LNG deals in the history of the industry
🇶🇦🤝🇨🇳🚨 Qatar will supply China with 4 million tons/year of LNG from 2026 for 27 years
🇪🇺 That heaps a TON of pressure on Europe, which has failed to sign a deal w/ Qatarhttps://t.co/YCDAPkmKOS— Stephen Stapczynski (@SStapczynski) November 21, 2022
Although European countries filled their storage early this year, at a heavy price, the region could struggle next year now, as the Nord Stream pipelines have been sabotaged.
The chair of the John Lewis Partnership has said that consumers are starting to budget and are more conscious of spending, despite being eager to celebrate the first “normal” Christmas in three years.
Speaking at a panel debate at the CBI’s annual conference, Dame Sharon White said there were signs of shoppers changing their habits as a result of cost-of-living pressures.
She told the conference:
“This is the first Christmas for three years that people get to spend with family, friends and loved ones, and I think people will be really excited to have a proper Christmas.
“But you can see all sorts of things going on with consumer spending.“We have got some customers who are doing their shopping early and have booked their Waitrose delivery slots in advance.
“On the other hand, you can see other customers starting to budget, and shopping is more phased.
“People are sticking more with own-brand, value ranges, and buying fewer branded products.
“Customers are also shopping a bit less online and are going more into stores in order to enjoy that shopping trip experience.”
The chief executive of Heathrow Airport is not expecting caps on passenger numbers next year – with airlines more worried about how demand will hold up.
John Holland-Kaye, who runs the UK’s busiest airport, says that the darkening economic outlook could
He told reporters at the Airlines 2022 conference today that:
“Airlines are concerned about the nature of demand.”
Heathrow was forced to limit passenger numbers to 100,000 per day this summer, after staff shortages led to long delays, flight cancellations and a lost luggage mountain.
Holland-Kaye is hopeful that such limits won’t be needed in 2023, saying:
“We’re working on the basis that we’ll have no caps next summer.”
