Supply constraints helped oil prices rise for the fourth straight week, with bulls strong and institutions bullish on $100/b

At the beginning of the Asian market on Monday (January 17), U.
S.
oil is now at $83.
88 / barrel; Oil prices rose for the fourth week in a row last week, marking the longest winning streak since October 2021
.
As global consumption weathers the Omicron pandemic, there are signs that supply and demand are tightening
.
In addition, fears of Russian attacks on neighboring Ukraine have also boosted oil prices
.

During the day, China's GDP data will be focused on, and the State Council's new office will hold a press conference
on the operation of the national economy.

Factors affecting oil prices

[Supply constraints combined with geopolitical tensions may cause oil prices to rise to $100/barrel]

Crude futures closed higher on Friday on the back of supply constraints and fears of a Russian attack on neighboring Ukraine, with oil prices set to rise for a fourth straight week, despite news that Asian giants will release crude reserves
around the Spring Festival.

Phil Flynn, senior analyst at Price Futures Group, said: "People looking at the big picture are aware that the global supply and demand situation is very tight, which has given the market a strong boost
.
”

He added that traders do not want to short at this time, as tensions between Russia and Ukraine are rising and trading volumes are usually lower
ahead of the Martin Luther King Jr.
Day long weekend.

U.
S.
officials on Friday expressed concern that Russia was preparing to launch an attack
on Ukraine if diplomatic mediation failed.
Russia has amassed 100,000 troops on the Ukrainian border, and the country has published photos
of the operation.

Several banks are forecasting oil prices to reach $100 a barrel this year, and despite news of the release of crude reserves by major Asian countries, banks still expect demand to exceed supply, especially as
capacity constraints from the Organization of the Petroleum Exporting Countries and its allies OPEC+ are in focus.

Rob Haworth, senior investment strategist at Bank of America Wealth Management, said oil market conditions are improving as people skip Omicron in anticipation of a restart and a rebound in activity, much like the scenario
in August 2021.
"Active rigs in the U.
S.
rose 11 this week to 492, the most
since April 2020.

[Technology stocks lead the market, Citi and other underperformance expectations drag down bank stocks]

The U.
S.
stock market ended a very turbulent week with a rally, led by the technology sector
.
Amid growing calls from heavyweights for higher interest rates, investors have recalibrated their trading strategies
.
The S&P 500 recovered losses in the final minutes before the close on Friday, with the Nasdaq 100 rising as dip buying poured
in after technology stocks fell to their lowest point since October.

Disappointing results from JPMorgan Chase and Citigroup weighed on bank stocks, but Wells Fargo rose, with better-than-expected fourth-quarter
revenue.

JPMorgan CEO Dimon said the Fed could raise interest rates as many as seven times and that the tightening process might not be as "gentle as some might think," but he did not say how quickly the hike would happen
.

New York Fed President John Williams noted that given the signs that the current labor market is very strong, the Fed is "close" to making a decision
to raise interest rates gradually.

Philadelphia Fed President Patrick Harker said "three or four rate hikes of 25 basis points each" this year are "appropriate
.
" ”

Callie Cox, US investment analyst at eToro, said: "With the Fed's 2022 rate hike expectations evolving from zero to four in a matter of months, investors' view of risk-return in different markets could change drastically, which could be troubling
.
”

Negative factors affecting oil prices

[Russia says Iran nuclear talks have made progress]

As the final round of talks on Iran's nuclear talks struggled, Russia's foreign minister said he expected world powers to be able to salvage the landmark deal
that limited Iran's nuclear activities in exchange for easing sanctions on Iran.
Lavrov told reporters
in Moscow on Friday.
"There is real progress and we expect to reach an agreement
.
"

[U.
S.
consumer confidence in early January was lower than expected]

In the United States, consumer confidence fell more than expected in early January as concerns about soaring inflation and the rapid spread of Omicron rose
.

Data released on Friday (January 14) showed that the preliminary value of the University of Michigan consumer confidence index fell to 68.
8 from 70.
6 in December last year, the second-lowest in a decade, and below the median expectation of economists polled by Bloomberg of 70
.

Americans expect inflation to be 4.
9 percent in the coming year, matching its highest level
since 2008.
They expect annual inflation to be 3.
1 percent over the next five to ten years, the highest since
2011.

Consumer confidence has also been affected
by the surge in coronavirus cases.
The current situation indicator fell to 73.
2, the lowest since 2011, and the future expectations indicator fell to 65.
9
.
The report continues to reflect stark partisan differences
.
While Democrats' confidence fell to a year-long low, their view of the economy remains far more optimistic
than Republicans.

[U.
S.
retail sales fall sharply, inflation puts pressure on consumers]

U.
S.
retail sales fell the most in 10 months in December, suggesting that the fastest inflation in decades is taking a bigger toll
on consumers amid a surge in coronavirus infections.

Data released by the Commerce Department on Friday showed that total retail sales fell 1.
9 percent in December, after a revised 0.
2 percent
increase the month before.
The figures are not inflation-adjusted, suggesting price-adjusted sales would be lower
.
Economists surveyed by Bloomberg expected retail sales to fall 0.
1%
month-on-month in December.

The decline in year-end retail sales cooled the first quarter of this year
.
This, combined with the impact of the Omicron variant, which has hit spending on services such as travel and eating out, helps explain why economists are predicting a slowdown
in household spending.
In addition, falling price-adjusted wages, shrinking savings and the end of government relief programs bode well for a more moderate
pace of consumer spending.

[U.
S.
manufacturing output unexpectedly fell in December]

U.
S.
manufacturing output unexpectedly fell in December, as the coronavirus pandemic put more pressure
on manufacturers already facing shortages of raw materials and supplies.

Federal Reserve data on Friday showed manufacturing output fell 0.
3 percent in December, compared with a revised 0.
6 percent
increase in the previous month.
Total industrial output, including mining and utilities, fell by 0.
1 per cent
.
Economists polled by Bloomberg expected a median 0.
3 percent increase in manufacturing output and a 0.
2 percent
increase in industrial output in December.
In the year to December, manufacturing output grew 3.
5 percent and industrial output 3.
7 percent
.

These figures highlight the difficulty
of moving from supply-demand imbalances to normalization in the commodity sector.
Omicron is just the latest hurdle to emerge, and plant managers are dealing with the impact
of the surge in infections on staff and production shifts.
In addition, challenges related to transport networks and shortages of various materials have hampered efforts to
increase supply.

[Widespread flight cancellation due to winter storm in the United States]

According to CNN local time on January 16, winter storms continued to invade the United States, and on the morning of the 16th, the storm passed through parts of the southeastern United States, raining freezing rain and snow and ice
.
As many as 80 million people will reportedly receive winter storm warnings
from the southeast to the northeast.

According to a report by flight-tracking data company FlightAware, American Airlines has canceled more than 2,400 flights
across the United States so far.
In addition, according to the official website of the PowerOutage.
US that records power outages in various places in the United States, affected by the blizzard, as of 9 o'clock Eastern time, at least 221461 households in the southeastern United States are currently in a state of power outage
.

Overall, concerns about the geopolitical situation and tighter supply drove oil prices higher; This week, oil prices may be more affected by Tuesday's OPEC monthly report and IEA monthly report; Also, watch out for flight cancellations caused by winter storms in the United States, or limit oil price increases
.