October 01. OPEC+ is considering options for a greater increase in productionOn Monday, October 4, the leaders of OPEC+ countries will meet to discuss the oil production deal and the conditions for its possible revision. The organization is considering the possibility of increasing the volume of production more than stipulated by the current agreement. Since July, the countries adhere to the volume of 400 thousand barrels per day.
Some sources claim that the increase in production may even amount to 800 thousand barrels per day for one month, after which production volumes will return to previous indicators. The next month in which an increase may occur is November, since October oil production volumes have already been agreed at the last OPEC+ meeting.
In anticipation of the OPEC+ meeting, oil prices began to decline. The current Brent quote is $77.83 per barrel, although more recently the cost of a barrel of oil fluctuated around $80 per barrel. WTI oil prices also declined to $74.50.
September 30. The energy crisis in China has hit the industrial sectorAmid the protracted energy crisis in China, small companies have begun to switch to diesel power generators or even stop working. In this regard, the Coal Industry Association expresses concerns about stocks ahead of winter.
Analysts note that China is facing the most severe energy crisis in recent years – power outages have affected a significant part of the country. Problems with electricity supplies caused by a jump in coal prices have been going on for the second week.
As you know, coal is the main source of electricity in China, and today its cost is kept near a record level amid a shortage of supply and strong demand from industrialists. Owners of many companies report that they are suffering unprecedented losses, and the official Purchasing managers Index (PMI) for China's manufacturing sector has fallen below 50 points for the first time since February 2020.
The Chinese Coal Industry Association warns of a low level of coal reserves at power plants and a possible shortage in the winter months, and asks companies to make every effort to increase supplies.
September 29. Analysts suggest that Evergrande may become another «black swan»Analysts note that, despite the fact that it is almost impossible to predict the appearance of «black swans» (since these are unexpected anomalous events), this time China and the default of the developer Evergrande may become the source of the global economic shock.
One of the most striking examples of the «black swan» is the coronavirus that came from China, the pandemic of which could not have been predicted. This time, the Celestial Empire may again become the birthplace of the next «black swan».
However, there are those who do not share this point of view. For example, Nouriel Roubini, professor of economics at New York University, who predicted the global economic crisis in 2008, said that he did not see any «black swans» in the short term. At the same time, the professor does not exclude the presence of some financial risks that may still cause a global crisis in the next 3-5 years.
According to Roubini, the soft monetary and fiscal policies of developed countries have led to the inflation of bubbles in financial markets. As the most obvious example, the professor cites cryptocurrencies, and the explosion of such a bubble may well cause turmoil in global markets.
There is also an opinion that the possible default of one of the largest Chinese developers Evergrande will only lead to a decline in demand for commodities and undermine the confidence of international investors in the Chinese real estate market.
Regards, ForexMart PR Manager