Price Performance Indicators

• In a week (4/24 - 4/28) the price of ICDX’s crude oil edged down 2.50 percent.   
• The highest volatility reached 3.07 percent. 

***************************************************************

Market Review

The price of the ICDX oil contract closed down almost 3 percent for the week ending April 28, weighed down by sentiment from negative statements made by the IEA, the potential for an easing of the Ukrainian conflict after China's involvement for the first time in mediating the conflict between Ukraine and Russia. In addition, Aramco's projected lower selling price for its June delivery to Asia also weighed on further price movements.

IEA Executive Director Fatih Birol on Wednesday warned OPEC to be careful not to cut production too much, lest crude oil prices rise to a point that stifles economic growth and pressures consumers to switch away from expensive fossil fuels to renewable energy. Birol's statement drew a strong reaction from the Secretary General of OPEC, Haitham Al Ghais, who on Thursday (27/4), emphasized that calls from the West for OPEC to stop investing in oil and gas are things that can actually cause price volatility in the future. Al Ghais also added that the increase in oil prices was triggered by various factors, not only because of OPEC's policies alone.

From Eastern Europe, Chinese President Xi Jinping and Ukrainian President Volodymyr Zelenskiy spoke via telephone on Wednesday (26/4) for the first time since Russia's invasion of Ukraine, fueling optimism that the Ukrainian conflict will subside. The talks fulfill what Kyiv has been asking for, which has been openly asking for such talks for months. China plans to focus on promoting peace talks and work on a ceasefire as soon as possible, Xi told Zelenskiy, quoted by Chinese state media (26/4).

Meanwhile, state oil company Saudi Aramco is expected to cut the official selling price (OSP) of its Asian-bound oil for delivery in June. Aramco could potentially cut prices by around 40 cents a barrel, said a Reuters survey conducted on Thursday (27/4), of five sources of traders. Aramco's OSP is usually released around the fifth of each month, and serves as a price reference for other Middle Eastern exporters such as Iran, Kuwait and Iraq, which affect about 9 million bpd of crude headed for Asia.

Market View

The Decisions of The Fed and ECB Are The Main Focus of The Market

US Treasury Secretary Janet Yellen on Monday (1/5) warned that the US could potentially run out of cash to pay debt bills as soon as June 1. On the same day, the US market itself was still overshadowed by anxiety in the banking sector, especially with the confiscation of First Republic Bank assets by US regulators to be sold to JPMorgan on Monday (1/5). This situation has made the market focus on the meeting of The Fed on Tuesday (2/5), as well as the meeting of the European Central Bank (ECB) on Wednesday (3/5), where many economists project that both the Fed and the ECB will continue to raise interest rates. Furthermore. Meanwhile, an increase in interest rates will usually also have an impact on reducing demand for oil and fuel.

OPEC+ Remains Calm Despite Downtrend in Oil Prices

Amid the downward trend in oil prices, the main producers of OPEC and their allies chose not to decide on any policy because this trend was considered to only have a temporary impact. Russian Deputy Prime Minister Alexander Novak even said (that OPEC+ does not see the need for further production cuts despite later-than-expected Chinese demand). Meanwhile, Iraqi crude production reportedly plunged by more than 6% to 3.94 million bpd in April, a source from state oil company SOMO said on Tuesday (2/5).The fall in Iraqi production triggered by the export halt helped to cause OPEC oil production in April to fall by 190 thousand bpd to 28.62 million bpd.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Source: ICDX Research