Crude oil trading reminder: The European Union stopped 90% of Russian oil imports, and escalating geopolitical tensions boosted oil prices

At the beginning of the Asian market on Tuesday, January 3, U.
S.
oil traded at $80.
47 / barrel; Although last Friday's EIA energy report showed that US demand for crude oil and petroleum products fell in October 2022; But Russia acknowledged on Monday that dozens of Russian military personnel had been killed in an attack that was one of the deadliest in the war in Ukraine, or could increase geopolitical tensions and boost oil prices
.

Factors affecting oil prices

[Russian barracks in eastern Ukraine were attacked by rockets, and the Russian Ministry of Defense confirmed the death of 63 soldiers]

Russia acknowledged on Monday that dozens of Russian military personnel were killed in an attack that was one of
the deadliest in the war in Ukraine.
The Defense Ministry said 63 soldiers died in the blast, which destroyed a makeshift barracks at a former vocational college in the twin city of Makiivka, the capital of the Russian-occupied region of eastern Ukraine
.
Separately, Ukraine said it carried out air strikes on civilian targets in Kiev and other cities for the third consecutive night, and Ukraine shot down all 39 drones fired by Russia
.

[Russian Ministry of Defense: Eliminate more than 70 foreign mercenaries]

The Russian Ministry of Defense reported on January 2, local time, that Russian Aerospace Forces fighters attacked temporary strongholds of foreign mercenaries in Donetsk and Kharkiv, eliminating more than 70 foreign mercenaries
.
The Russian army also destroyed Polish-made self-propelled guns in Kherson and 2 American-made M777 howitzers in Donetsk; Dnipropetrovsk and Zaporozhye attacked the Ukrainian army oil depots
, respectively.
In addition, the Russian air defense system also shot down 15 Ukrainian drones
in various places.

[Gazprom's natural gas production and exports decline in 2022]

According to CCTV news, on January 2, local time, Gazprom CEO Miller said that the company's natural gas production in 2022 reached 412.
6 billion cubic meters, a decrease of about 20%
compared with 2021.
Last year, the company exported 100.
9 billion cubic meters of natural gas, down 45.
5%
compared to 2021.

[EU stops 90% of Russian oil imports]

According to the Ukrainian state news agency, EU Ambassador to Ukraine Matti Maasikas said, "We have significantly reduced our dependence on
Russian energy.
" Because one of the main sanctions adopted by the EU is to stop 90% of oil supplies from Russia by the end of 2022, thereby depriving Moscow of the corresponding income
.
Maasikas pointed out that Russia is able to sell oil to other markets, but it is limited because it is forced to give a steep discount on each barrel of oil (Russian oil sells for about $30 below the global average).

In addition, the EU ambassador noted that the most important point is that this gradual oil embargo and reduction in gas imports liberated Europe from its energy dependence on Russia
.

[UK stops importing liquefied natural gas from Russia from January 1]

According to TASS news agency, on January 2, local time, the British Department of Foreign Affairs, Commonwealth Affairs and Development posted on social media that the UK has stopped importing liquefied natural gas
from Russia from January 1.
After the outbreak of the Russian-Ukrainian conflict, the volume of Russian gas imports by the United Kingdom fell
sharply.
Last year, the UK imported 3.
12 billion cubic meters of Russian gas, about 4%
of the UK's total gas consumption.

Negative factors affecting oil prices

【U.
S.
demand for crude oil and petroleum products declines in October 2022】

Monthly data released by the U.
S.
Energy Information Administration (EIA) on Friday showed that U.
S.
demand for crude oil and petroleum products fell in October 2022, even as oil production rose to its highest level
since the pandemic.
U.
S.
crude production rose 0.
6% to 12.
38 million b/d in October, the highest level
since March 2020.

However, production growth in October was the slowest since July as shale oil growth showed signs of slowing; The latest survey released by the Federal Reserve Bank of Dallas found that oil production growth in major U.
S.
oil-producing states has slowed, and inflation, supply chain hurdles and economic uncertainty have caused industry executives to lower expectations
.

Total natural gas production in the 48 contiguous U.
S.
states rose 0.
1 percent to a record 102.
94 billion cubic feet per day
in October.
U.
S.
demand for crude oil and petroleum products fell 55,000 b/d to 20.
42 million b/d in October, the lowest level
since July, EIA's monthly oil supply report showed.
However, demand for finished vehicle gasoline rose 13,000 b/d to 8.
83 million b/d
in October, EIA said.

[Petrobras cuts jet fuel prices by 11.
6%]

Petrobras announced on Monday that it had cut refinery jet fuel prices by an average of 11.
6 percent since Jan.
1, the company's second consecutive price
cut.
The company said jet fuel prices have been cut five times since July last year, for a total of 22.
5 percent
.

[Major investment banks predict that the US economy will fall into recession in 2023]

More than two-thirds of economists at the 23 large financial institutions that do business directly with the Fed believe the U.
S.
economy will slip into recession
in 2023.
Two others predict a recession in 2024
.
They listed red flags such as Americans reducing their savings during the pandemic, the housing market is slipping, and banks are tightening lending standards
.
Most economists expect the rate hike to raise the unemployment rate to more than 5 percent from 3.
7 percent in November, which remains low by historical standards but could leave millions of Americans out of work
.
They also expect the U.
S.
economy to shrink in 2023, and while it performed relatively well during the 2022 rate hikes, economists say the cooling effect of rate hikes will be more pronounced
in 2023.
They predict that the Fed may raise interest rates in the first quarter of this year, pause it in the second quarter, and start cutting interest rates
in the third or fourth quarter.

Overall, the European Union stopped 90% of Russian oil imports, coupled with Russia's admission on Monday that dozens of Russian military personnel were killed in attacks, one of the deadliest attacks in the war in Ukraine, escalating geopolitical tensions or pushing oil prices higher in the short term, oil prices maintained a volatile upward view during the day, in addition, focus on the final Markit manufacturing PMI in the United States for December
.

At 8:16 Beijing time, U.
S.
crude oil is now at $80.
47 per barrel
.