December 22. Oil prices rose sharply amid the energy crisis in Europe

Yesterday, oil prices showed a steady increase against the background of the energy crisis in Europe: the cost of gas in the region overcame another historical maximum at $2,187 per thousand cubic meters. And in such conditions, the demand for petroleum products will inevitably grow. 

On Wednesday morning, Brent oil quotes settled at $73.91 per barrel. Yesterday's daily high was marked at $74.57. North American WTI crude oil rose to $71.78 per barrel. 

Additional support for the oil market was provided by yesterday's data from the American Petroleum Institute (API), according to which crude oil reserves in the United States decreased by 3.67 million barrels. Today, we should pay attention to a similar report from the US Department of Energy, and if official data also confirm a reduction in raw materials stocks – this will be the fourth week of decline in a row. 

Analysts and market participants also continue to monitor the situation with the emergence of a new omicron strain of coronavirus. Experts fear that the new strain carries even greater risks for global oil demand than its predecessors. «Any threat of falling demand will contribute to investors avoiding risks and outflow of funds from energy markets,» experts say.

December 23. Oil is declining after yesterday's jump

Last night, after the release of statistics from the US Department of Energy on crude oil reserves in the country, Brent quotes jumped sharply to the level of $75.71 per barrel. Today, the price is declining, approaching the $75.00 mark. The price of WTI crude oil showed a decrease from $73.20 to $72.50 per barrel.

According to official weekly data on the energy market in the United States, stocks of raw materials decreased by 4.7 million barrels, while analysts predicted a smaller reduction – by only 2.7 million barrels. Oil reserves in the States have been declining for the fourth week in a row. At the same time, gasoline reserves increased by 5.53 million barrels, distillates – by 396 thousand barrels.

Additional support for the market is provided by various news that helps to reduce nervousness about the omicron strain, as well as the release of good statistics on the United States. The US GDP in the final assessment and the consumer confidence index from the Conference Board came out better than expected.

Quotes are also supported by the news about the suspension of production at several fields in Libya, as a result of which the country lost more than 300 thousand b/d of production.

December 27. Great Britain faces a serious energy crisis

Analysts do not exclude that the UK will face a worsening economic situation due to gas prices, similar to what happened during the 2008 financial crisis.

Stephen Fitzpatrick, chief executive of OVO Energy, the nation's second-largest energy supplier, compared the current state of affairs to the period between the collapse of the Northern Rock bank and the collapse of Lehman Brothers a year later.

The current crisis is not expected to end soon. Moreover, Fitzpatrick accused the British authorities of being too slow in finding suitable solutions to break the impasse.

The UK government itself said it was in constant contact with representatives of the energy industry, and promised to protect consumers from rising prices.

Among the main causes of the energy crisis in Europe are unfavorable weather, inefficient operation of wind farms this year and insufficient gas reserves in underground storage on the continent. Britain also believes that Russia was the culprit in the crisis in Europe, but Moscow has denied the allegations. He pointed out that the European Commission itself insisted on the market pricing of the energy carrier, which ultimately led to the crisis.

December 29. Mexico will stop exporting oil

Mexico has decided to process almost all the oil produced in the country on its own. In 2023-2024, the Dos Bocas oil refinery and the Kangrejera petrochemical complex will be launched, said Octavio Oropesa, head of the Mexican oil and gas state company Pemex.

It follows from this that Mexico will almost 100% abandon oil exports. Earlier, the country's president Andres Manuel Lopez Obrador has already stated that the government intends to stop exports before the expiration of Obrador's term in 2024. By doing this, the authorities intend to preserve hydrocarbon reserves for future generations.

Pemex's loss amounted to $4 billion in January-September. The company increased oil production to 1.73 million barrels per day, and exports of «black gold» increased by 58% to $25.2 billion.

Recall that back in April 2020, the OPEC+ countries agreed to reduce production by 10 million b/d, but Mexico refused to reduce production by 400 thousand b/d, putting the deal on the verge of collapse. The situation was saved by the United States, which agreed to reduce its quota by 400 thousand b/d. Experts note that if Mexico withdraws from the world oil market, it will facilitate the procedure for concluding agreements within the framework of OPEC+. At the same time, Mexico's share in the world market may be taken by Russia, Saudi Arabia and the United States.

December 28. Gold has risen to a maximum of the last five weeks

Gold prices on Tuesday rose to the highest level in five weeks, reaching $1,819.35 per ounce. The current quote of the precious metal is $1817.75. The last time such values were recorded was in mid-November.

Prices were supported by the weakening of the dollar, since strong statistical data from the United States and high inflation did not lead to a jump in the exchange rate of the US currency and the yield of government bonds. The US economy in the third quarter grew by 2.3% in terms of annual rates, the estimate of the indicator was increased from the previous 2.1%. And the PCE Core index, a key inflation indicator for the Federal Reserve, jumped 4.7% in November compared to the same month last year, the fastest pace in more than 30 years.

This week, gold may well continue to rise, but the growth will be short-lived. Analysts note that gold's attempts to demonstrate a significant recovery are still inconclusive, and traders cut long positions at the first signs of trouble. 

As for the other metals, the picture is as follows: silver rose 0.2% to $23.08 per ounce, platinum rose 0.3% to $973, and palladium fell 0.7% to $1957.68, retreating from the more than monthly peak reached in the previous session.

January 4. Prospects of the precious metals market

In 2021, everything except precious metals rose in price: oil jumped in price by 55%, copper increased by 25% over the year, and inflation in the United States reached a 40-year high of 6.8%. At the same time, gold not only did not grow, but also lost about 4% in price over the year. 

In fact, there is quite a logical explanation for this. The gold market is under pressure from the tightening of monetary policy by the US Federal Reserve. Market participants fear that the beginning of a cycle of interest rate increases will inevitably play against gold. Which leads to the fact that the market begins to look for more profitable instruments. 

Many investment banks have already submitted their forecasts for 2022. In particular, JPMorgan expects an average gold price of $1,630 per ounce in 2022. Deutsche Bank is more conservative and expects $1,750 at the end of the year. The current price of an ounce of precious metal is $1808. 

However, there are also those who hold more positive views on the dynamics of gold, expecting its value in the new year at the level of $ 2000-2100 per ounce. Investors believe that the «fashion» for risky assets will not always be relevant, so when gold becomes a sought-after asset again, its value can easily grow by 15-20%. Especially after a bad year. 

There are many reasons that can change the vector of the direction of gold: there is an out-of-control inflation, new Covid strains and restrictions, as well as geopolitics and general tension in the world.

January 3. What awaits the oil market in the new year

During the first trading day of the new year, the oil market demonstrates a multidirectional movement, first continuing the decline that began at the end of the past year, and then sharply jumping up. The current Brent quote is $78, WTI oil is trading at $75.38 per barrel. 

The pressure on prices is exerted by the continuing concern of the market about the fall in demand due to the new strain of the omicron coronavirus. At the same time, analysts note that due to mass vaccination in 2021, the threat of Covid in the world has significantly weakened, and by the end of 2021, Brent has grown by 34%, and WTI – by 38%. The growth was mainly due to the gradual lifting of restrictions on air travel and tourism and, accordingly, the growing demand for oil. 

Predicting the movement of the oil market in 2022, analysts note that the periodic appearance of new strains of coronavirus may cause the resumption of lockdowns and restrictions in certain countries and sectors of the economy. Therefore, the oil market situation in the new year will not be too stable, and the market is waiting for sharp price fluctuations.

Another risk for the oil market in 2022 may be an increase in oil production in the United States. According to the IEA forecast, the supply of oil will also increase sharply in Canada and Brazil, and this will mean that there will be an excess supply of oil in the market of 2 million b/d, of which 1.1 million b/d will be for oil production in the United States.

Tomorrow, January 4, a regular meeting of the ministers of the OPEC+ member countries will be held, at which the parameters of the implementation of the current agreement on increasing oil production by 400 thousand barrels per day will be discussed, and quotas for January will also be set. Most likely, they will remain unchanged – the same as in December 2021. However, if the threat of new, more dangerous Covid strains persists, OPEC+ may temporarily suspend production increases due to uncertainty about future oil demand.

For 2022, we predict that the price of Brent oil will move on average in the range of $65-$90 per barrel, and during the first quarter of 2022 – in the range of $69-79 per barrel.

January 5. Europe may be left without gas in two months

Experts note that against the background of the energy transition, gas reserves in the EU turned out to be insufficient, which could lead to the fact that by the end of winter, the level of reserves in storage facilities could fall to a historic low of 15%.

Today, Europe is in the midst of the so-called energy transition – countries are closing coal-fired power plants, thereby increasing dependence on renewable energy sources. And although wind and solar energy is much cleaner, these sources are fickle: last year, electricity generation in Europe fell sharply. And since there are still two cold winter months ahead, gas in European countries may simply run out. 

Storage facilities in Europe are 56% full, which is 15 percentage points lower than the average for ten years. According to analysts, if Russia does not increase gas supplies, by the end of March, the level of reserves in Europe will drop to 15%, which could be the lowest in history. Experts note that without additional supplies of Russian gas via the Nord Stream-2, 2022 will be another unstable period for European prices for blue fuel.

Last year, exchange prices for gas in Europe broke several records. On December 21, the cost of fuel for the first time exceeded $2 thousand for 1 cubic meter . This was caused by a decrease in pumping through the Yamal-Europe gas pipeline, information about the launch of Nord Stream 2 no earlier than the second half of 2022, as well as news about a possible cooling in Europe.

January 10. Wall Street futures decline in anticipation of further inflation in the US

Monday began with a decline in futures on major US stock indexes. Pressure on the market is exerted by the expectations of statistics, which should confirm the continued acceleration of consumer price growth in the United States.

In particular, futures for the Dow Jones Industrial Index (DJIA) declined by 0.02% to 36102 points, futures for the S&P 500 broad market index – by 0.11% to 4662.75 points, and the NASDAQ high–tech index – by 0.29% to 15536 points.

Consumer price statistics in the United States will be published on Wednesday. Analysts suggest that last year's inflation was 7%, which will be the highest since 1982. A month earlier, annual inflation in the United States reached 6.8%.

Experts note that the stronger-than-expected growth in average wages in the country reinforced the inflation expectations of investors. If the forecasts turn out to be correct, the US Federal Reserve will have to start raising the discount rate earlier than planned. 

However, the tightening of monetary policy is unfavorable for nominal stock prices. High-tech companies, whose value depends more on future profits (which, in turn, is closely related to «cheap» money in the economy), may suffer the most. Therefore, NASDAQ futures are getting cheaper more significantly than other indices.

January 11. Gold rises in anticipation of Powell's comments

The price of gold on Tuesday is rising for the third session in a row amid a decline in the dollar and treasury yields ahead of a speech by the head of the US Federal Reserve Jerome Powell. Market participants are confident that the regulator will start raising interest rates very soon, which puts pressure on the US currency exchange rate. 

The spot price of gold rose today to $1.810 per troy ounce, subsequently declining to $1.805.

The yield on 10-year Treasury bonds retreated from a near two-year high, and the dollar declined against its main competitors. 

Jerome Powell promised to prevent further acceleration of already high inflation. And it is the inflationary rhetoric of the policy that will be the central topic of the hearings in the banking committee devoted to the consideration of Powell's candidacy for a second term at the head of the Fed.

In addition to Powell's speech, markets are waiting for tomorrow's data on consumer prices in the United States: the index is expected to have grown in December by 5.4% year-on-year compared to November's 4.9%.

Palladium has risen in price today to $1,937.78 per ounce, silver – $22,710 per ounce, and platinum – up to $950,00.

January 12. The first bitcoin transaction is 13 years old

Exactly 13 years ago, on January 12, 2009, the creator of bitcoin under the pseudonym Satoshi Nakamoto made the first transaction in cryptocurrency, sending 10 BTC to cryptographer Hal Finney. Hal Finney played a crucial role in the history of bitcoin, and according to one version, he was the creator of the cryptocurrency. Since then, 700 billion transactions have been made. 

The first BTC transaction was confirmed in block #170. The cost of the cryptocurrency received by Finney was almost zero. According to him, the cryptographer extracted several blocks on his own personal computer. Since then, cryptocurrency mining has become an industry in which specialized high-performance devices are used, and the hashrate of the network exceeds 170 EH/s.

However, currently, the solo mining of cryptocurrencies continues. Yesterday, an unknown miner with an equipment capacity of 126 TH/s included block #718124 in the blockchain. Experts note that the probability of this event was less than 0.0001%. The anonymous miner received a reward of 6.25 BTC. As you know, in 2009, 50 BTC was charged for the extracted block, but this figure is halved approximately every four years.

In December 2021, miners mined 90% of bitcoin. Analysts note that the cryptocurrency is expected to reach the issue limit of 21 million coins in 2140.

13.01. Oil is growing after the publication of reserves statistics

On Thursday, the price of oil continues to rise, despite the appearance of quite alarming signals. The current Brent quote is $84.75, North American WTI oil is trading near $82.50 per barrel. 

Yesterday, industry statistics from the US Department of Energy were presented, and the data came out somewhat ambiguous. In particular, according to the weekly report, oil reserves in the United States decreased by 4.6 million barrels, which turned out to be better than forecasts. Production decreased by 100 thousand b/d to 11.7 million b/d. 

At the same time, gasoline stocks jumped by 8 million barrels at once, exceeding the average level for 3 years. Moreover, the level of oil refining remained stable, and the loading of the refinery even decreased slightly, from 89.8% to 88.4%. This may mean that the growth of gasoline stocks is associated with the weakness of demand. If this turns out to be a temporary phenomenon, then oil prices will remain high. Otherwise, alarm signals may begin to put pressure on oil prices. 

Brent and WTI are supported by the general weakness of the US dollar after the release of inflation data. The growth of consumer prices in the country reached 7% (in November, inflation was 6.8%), which was the highest since 1982. Against this background, the DXY dollar index showed an impressive drop, updating two-month lows.

January 17. Oil jumped to a three-year high

The price of Brent crude oil on Monday jumped sharply to a three-year high at $86.69 per barrel. The cost of a barrel of North American WTI oil has risen to $84.09 (the maximum since November 10, 2021).

The main support for the oil market is provided by expectations that supply will remain limited against the background of curbing production by major producers, and global demand will not suffer from a wave of infections with the Omicron coronavirus strain.

Analysts note that bullish sentiment persists, as OPEC+ does not provide sufficient supply to meet high global demand. And if investment funds increase the share of crude oil, prices may reach 2014 highs.

Experts are also confident that a summer surge in demand is inevitable ahead, especially in Europe and the United States, which may be greater than last year (if the hopes that Omicron will finally turn the Covid-19 pandemic into an epidemic are justified).

However, during the day, Brent quotes declined slightly, to the level of $85.60 per barrel, amid an increase in production in Libya. According to the National Oil Corporation of the country, the total volume of oil production has returned to the level of 1.2 million barrels per day. Recall that last week production in Libya was about 900 thousand barrels per day due to the blockade of western fields.

January 14. European stock exchanges decline on Friday

According to Friday's trading data, Europe's main stock indexes are declining after the release of data on the first monthly trade deficit in the eurozone in almost eight years. A similar indicator in the UK, which is now not part of the euro area, is fixed at almost zero. 

The German DAX index declined during the day to 15,833.73 points, the French CAC 40 – to 7,119.01 points, the British FTSE 100 – to 7,523.02 points.

European macro statistics exerted pressure on the stock market. Thus, the deficit of the foreign trade balance of the eurozone countries in November amounted to 1.5 billion euros after a surplus of 3.6 billion in October. At the same time, analysts expected a surplus of 7.6 billion euros. The European statistical Agency Eurostat also noted that the trade deficit was recorded for the first time in a month since January 2014.

It is also worth noting that the stock markets of Europe repeat the dynamics of the American and Asian ones, which closed mainly in the red (due to news about the deterioration of the epidemiological situation in these countries).

January 20. Cryptocurrencies are declining on expectations of a tightening of the Fed's policy

Since the beginning of the new year, the cryptocurrency market has been showing steady weakening amid expectations that the US Federal Reserve System will soon begin to tighten monetary policy.

The bitcoin exchange rate has decreased by 9.3% since the beginning of the year, and the Ether exchange rate, the second largest cryptocurrency after bitcoin, by 14.5%. The current BTC quote is $43,308.60, and the Ether quote is $3,253.92.

The Fed is expected to raise the base interest rate in March and raise it at least three times in 2022. Some experts suggest that the rate increase in March may amount to more than 25 basis points. However, these are only assumptions, but market participants are waiting for «hawkish» comments from the Central Bank's leaders at the Fed meeting on January 25-26.

At the same time, the dynamics of bitcoin is likely to remain volatile as a result of «hawkish» rhetoric, as analysts note. 

The negative dynamics of cryptocurrencies also affected the shares of companies related to the industry. For example, the price of Coinbase Global Inc. securities has dropped by 13% since the beginning of the year, Marathon Digital Holdings Inc. – by 24.4%, Riot Blockchain Inc. – by 21.7%.

January 24. Bitcoin skids to a 6-month low

During Monday's trading session, the bitcoin exchange rate continued the fall, which began at the end of last week. The current quote of the cryptocurrency is $33.483. The last time such price values were recorded a half year ago, in July 2021. 

Since the beginning of the week, bitcoin has lost about 9%. Analysts say the main reason for the fall is the decline in the value of shares of the largest technology companies. In particular, the head of Tesla, Elon Musk, lost $25.1 billion, the head of Meta (former Facebook), Mark Zuckerberg, became poorer by $ 10.4 billion, and Changping Zhao, the owner of the Binance cryptocurrency exchange, lost $17.7 billion.

In turn, the reason for the decline in the securities of technology giants was the widespread spread of the omicron strain, as well as the prospect of lower interest rates in the United States and the growth of instability in the world. At the same time, the main pressure on the crypto market was caused by fears of a military conflict between Russia and Ukraine – recently it became known that the United States and Great Britain began to withdraw diplomatic representatives from Ukraine. 

Many analysts predict a further decline in the value of the most popular cryptocurrency – up to $ 20 thousand.

January 25. Nikkei falls to 5-month low

The Japanese Nikkei stock index closed near a five-month low on Tuesday due to investor caution amid the situation on the border with Ukraine, the expansion of inflation risks and concerns about a faster-than-expected increase in the US Federal Reserve interest rate.

The current index value is 27.131.34 points, which was the lowest since August 20. During the trading session, the Nikkei declined to 26.890.94 – the lowest since December 29.

The broader Topix index dropped to 1.862.62. The Mothers Index of startups has fallen to its lowest level since April 2020.

Analysts note that the main driver of the downward dynamics of the index was the decline in the value of shares in the Japanese technology sector. In particular, the securities of the investor in startups SoftBank Group fell by 5.34%, shares of the manufacturer of equipment for creating chips Tokyo Electron – by 2.69%. NIDEC lost 4.44%.

The monetary policy of the US Federal Reserve also has an important impact on the index. A two-day meeting of the US regulator starts today, and investors assume that there is a small chance that the central bank will unexpectedly announce a rate hike from January. 

Additional pressure on the Nikkei is also exerted by geopolitical tensions related to the buildup of Russian troops on the border with Ukraine. Yesterday it became known that NATO is putting its troops on alert and strengthening its positions in Eastern Europe with additional ships and fighters.

January 26. The US will release another 13.4 million barrels of oil from strategic reserves

The US Department of Energy has announced plans to release an additional 13.4 million barrels of oil from the country's strategic reserves. 

The release of reserves will be distributed among seven companies: Shell will buy 4.2 million barrels, Trafigura – 3 million, Phillips 66 Company – 2.3 million, Macquarie Commodities Trading – 2 million, Chevron – 0.885 million, ExxonMobil – 0.515 million and BP Products North America – 0.5 million barrels.

Recall that US President Joe Biden in November 2021 announced the release of 50 million barrels of oil from reserves due to high oil prices in the world and gasoline in the States themselves. The first deliveries were made in December, and the rest will be carried out gradually until April. The return of reserves to the strategic reserve is planned for 2022-2024.  

Today, oil quotes are showing growth again. The current Brent quote is $88.00 per barrel. Raw materials are getting more expensive after the release of yesterday's report from the American Petroleum Institute (API), according to which stocks decreased by 872 thousand barrels after rising by 1.4 million barrels a week earlier.

Today, we should pay attention to similar statistics from the US Department of Energy. Experts expect that oil reserves in the country decreased by 2.1 million barrels last week, gasoline reserves increased by 2.2 million barrels, and distillate reserves decreased by 1.6 million barrels.

January 27. The US economy in 2021 showed the highest growth rate since Reagan

According to the Bureau of Economic Analysis of the US Department of Commerce, the country's gross domestic product increased by 5.7% for the whole of 2021 after falling by 3.4% in 2020. Such economic growth has become the most impressive in the last almost 40 years, since the presidency of Ronald Reagan. 

In the last quarter of 2021, US GDP increased by 6.9% on an annualized basis, which exceeded analysts' expectations of 5.5% growth. 

In 2020, the American economy shrank for the first time since 2009 (by 3.4%), and the reason for this was the global coronavirus pandemic. However, by the middle of 2021, the economy had recovered and returned to the pre-pandemic level. 

Analysts note that high economic growth in the United States is accompanied by high inflation – it is also at multi-year highs. In particular, in 2021, inflation accelerated to 7%, which was the largest indicator since 1982. 

In response, the US Federal Reserve announced that it was curtailing anti-crisis measures, and in March it could raise the base interest rate for the first time in four years. Representatives of the regulator note that a tougher monetary policy is able to restrain price growth significantly exceeding the target level of 2%.

February 1. Gold is rising on Tuesday morning on political tensions

The value of gold is steadily growing on the first day of February. The current quote of the precious metal is $1.803 per ounce. Analysts call the main reason for the growth of the asset the strengthening of foreign policy tensions in the international arena caused by the contradictions around Russia and Ukraine.

And since gold is a «safe haven asset», increased tension successfully supports demand for it, somewhat leveling the recent weakening from the $1.850 level due to the tightening of the monetary policy of the US Federal Reserve System. Traditionally, gold acts as a resource that investors prefer to acquire in the event of difficult and questionable situations. 

The markets are also focused on the meetings of the European and British central banks on Thursday. If both regulators agree to increase interest rates, the demand for national currencies will grow, and for the precious metal will decrease.

Analysts also presented a report on the global demand for gold by the end of 2021. According to statistics, demand reached the level of 4,021 tons, which was facilitated by a 50% growth in the fourth quarter. In annual comparison, the indicator increased by 10%. It is noted that such indicators are caused by the recovery of the jewelry and technology sectors of the industry, as well as active purchases of gold from central banks.

January 31. Oil remains near highs at the beginning of a new trading week 

On Monday, oil prices remained stable at $89 per barrel after jumping to seven-year highs last week. 

The current Brent quote is $88.90, North American WTI oil is trading near $87.30 per barrel. 

Both brands of oil rose in price for the sixth week in a row. Since the beginning of the year, their cost has risen by about 16%, while the growth rate at the end of the month may be the highest since February 2021.

The main support for commodity assets is provided by concern due to problems with oil supplies, coupled with continuing geopolitical risks. An additional growth factor was a sharp cold snap in the United States, which increases the demand for fuel.

This week, on February 2, an important event for the oil market will take place – a meeting of OPEC+ ministers. Market participants expect that the alliance countries will decide to continue to increase their total production by the planned 400 thousand barrels per day on a monthly basis.

February 2. OPEC+ countries will increase oil production in March by 400 thousand barrels per day

A meeting of OPEC+ ministers was held today, at which it was decided to jointly increase oil production in March 2022 by 400 thousand barrels per day. Russia's quota in the March increase remains the same – 109 thousand barrels per day. 

The alliance's ministerial meeting was a record short one and the decision to maintain the terms of the deal was made in half an hour. The next OPEC+ meeting, where the alliance's policy for April will be discussed, will be held on March 2.

After the announcement of the results, the price of Brent oil jumped to around $90.50 per barrel, declining some time later to $89.30. WTI crude oil is trading near $88.10 per barrel. Since the beginning of the year, oil quotes have increased by more than 17%. 

The OPEC+ decision not to increase the production recovery rate above the planned rate may contribute to a further rise in the price of hydrocarbons

February 3. The Bank of England may raise the key rate for the second time in a row

A regular meeting of the Bank of England will be held today, at which, as expected, the regulator may raise the key rate for the second time in a row – from the current 0.25% to 0.5%, against the background of record inflation in the UK for 30 years. The last time the British Central Bank raised rates at two meetings in a row was in 2004.

It is worth noting that consumer prices in the UK in December 2021 jumped by 5.4% compared to the same month of the previous year, showing record growth rates since March 1992. 

The British regulator raised the rate in December last year to 0.25%. At the same time, the Bank of England became the first among the world's central banks to take such a step, noting that some moderate tightening of monetary policy will be necessary to achieve the 2% inflation target.

In addition, in December, the Central Bank decided to leave unchanged the volume of the asset repurchase program at the level of 895 billion pounds, including the repurchase of government bonds in the amount of 875 billion pounds. However, it is possible that today the Bank of England will stop all reinvestments in the framework of asset purchases. 

According to experts, the main message of the British regulator will be that a moderate tightening of monetary policy is necessary to maintain the stability of the economy. They also expect that inflation may peak at 6.5% and will slow down for a longer time than previously expected, remaining above the 2% target for two years.

February 7. Oil market declines after reaching multi-year highs

Brent oil started today with an increase to the level of $93.99 per barrel, continuing to update multi-year highs. The last time the price of oil reached the area of $94 in 2014. The price of North American WTI oil is located near $92.70. 

Analysts note that the main support for quotes is provided by expectations of maintaining a limited supply against the backdrop of recovering demand.

An additional growth factor is the continuing concern due to geopolitical risks, as well as doubts about OPEC's ability to supply in sufficient volume and the cooling in the United States. Experts believe that the deterioration of the geopolitical situation in Eastern Europe may lead to an increase in the price of oil to the region of $ 120 per barrel. 

However, following the highs, a technical correction is possible. That's what we see on the charts of the movement of oil quotes today. After the morning growth to the level of $94 per barrel, prices fell to $91.20. However, the reason may lie not only in the correction. Today it became known that negotiations between the United States and Iran on the resumption of the nuclear deal are probably close to completion, which will lead to an increase in the level of oil supply.

February 8. Gold is getting cheaper on the expectation of a faster Fed rate hike

On Tuesday, the price of gold was declining as the US dollar rose in anticipation of inflation statistics. Investors predict that the Federal Reserve will signal an aggressive tightening of monetary policy and multiple interest rate hikes this year.

The spot price of precious metals in the morning declined to $1816 per ounce, recovering during the day to $1820. 

Inflation data in the United States will be published on Thursday. The consumer price index for January is expected to show an annual growth of 7.3%, which would be the highest jump since 1982. And as experts note, high inflation may force the Fed to tighten policy faster, which will lead to an increase in the opportunity costs of owning non-profitable gold.

Additional support for gold is provided by the ongoing tensions around Russia and Ukraine, as the precious metal is used as a safe haven asset.

As for the other metals, palladium fell today to $2200, silver declined to $22,777, and platinum fell to $1004.25 per troy ounce.

February 10. Oil reserves in the United States unexpectedly fell, production increased

According to the weekly report of the Energy Information Administration of the US Department of Energy, commercial oil reserves for the week ended February 4 unexpectedly decreased by 4.8 million barrels to 410.4 million barrels. Analysts, on the contrary, expected an increase of 400 thousand barrels. 

At the same time, the strategic reserve of oil in the country decreased by 1.4 million barrels to 587.5 million barrels. And oil reserves at the country's largest terminal in Cushing decreased during the reporting period: from 30.5 million barrels to 27.7 million.

In addition, the report indicated a decrease in gasoline inventories by 1.6 million barrels to 248.4 million. Analysts had expected an increase of 1.6 million barrels. Distillate stocks decreased by 0.9 million barrels to 121.8 million barrels. A decrease of 1.7 million barrels was predicted.

Oil production

The Ministry also shared statistics on oil production in the United States. Its indicators increased by 100 thousand barrels per day to the level of the previous week – up to 11.6 million barrels.

On average, over the past four weeks, production in the United States amounted to 11.6 million barrels per day.

It is worth noting that on February 8, the Ministry of Energy raised the forecast of average oil production in the country by the end of this year to 11.97 million, and next year to 12.6 million barrels per day.

February 9. ECB on the verge of tightening monetary policy

German Central Bank Governor Joachim Nagel suggested that the European Central Bank could raise interest rates this year, as inflation is likely to remain high for longer than expected.

Nagel, who headed the Bundesbank in January, also said that if the inflation picture does not change by March, Germany will advocate the normalization of monetary policy. And the first step to this is to stop net bond purchases during 2022. 

The head of the European regulator itself, Christine Lagarde, also said last week that inflation in the eurozone will remain at an elevated level for longer than the ECB expected. Moreover, Lagarde said that the regulator can no longer rule out the scenario of a rate hike in 2022. Such a «hawkish» bias, following December comments that the ECB is unlikely to raise rates in the new year, had an immediate impact on European debt yields.

At the same time, Lagarde tried to reassure investors, assuring that any changes in the ECB's policy would be gradual. 

Experts believe that the first ECB rate hike is likely to occur in the fourth quarter of the year, and the next round will take place in early 2023. Inflation in the eurozone is expected to be around 4% throughout the year. The current inflation rate is 5.1%.

February 11. The US stock market fell on inflation data

US stock indexes fell sharply after the publication of statistics on inflation in the United States. 

According to the Ministry of Labor, consumer prices (CPI) jumped 7.5% in January compared to the same month in 2021, which was a record inflation rate since 1982. In December last year, the growth rate of consumer prices accelerated by 7%.

After the release of the data, the yields of American government securities jumped sharply. The interest rate of ten-year US Treasuries has risen above the 2% mark for the first time since 2019.

The stock market did not stand aside either: indicators of all 11 S&P 500 industry groups ended trading in the red on Thursday, the subindex of technology companies most sensitive to interest rate hikes fell by 2.1%. The value of Qualcomm Inc. shares decreased by 5.3%, Advanced Micro Devices Inc. – by 5.3%, Adobe Inc. – by 5.1%, Apple Inc. – by 2.3%.

The Dow Jones Industrial Average index fell by 526.47 points (1.47%) to 35241.59 points by the close of the market on Thursday.
The Standard & Poor's 500 declined by 83.1 points (1.81%) to 4504.08 points.
The Nasdaq Composite lost 304.73 points (2.1%) to 14,185.64 points.

Analysts expect that high volatility in the stock market will continue until the March Fed meeting, at which the key rate is likely to be increased.

February 14. Gold has risen to a maximum of three months due to geopolitics

Gold prices jumped on Monday amid increased demand for protective assets due to high geopolitical tensions on the border of Russia and Ukraine. 

In particular, the precious metal quotes reached the level of $1.864.85 per ounce, which became a three-month high. 

Over the weekend, it became known that the adviser to the American president on national security, Jake Sullivan, said that Russia has the opportunity to attack Ukraine without waiting for the end of the Olympics in Beijing. After that, a telephone conversation took place between the Presidents of the United States and Russia Joe Biden and Vladimir Putin, but he could not ease the tension.

The American president ruled out the possibility of sending American soldiers to Ukraine, but threatened Moscow with large-scale sanctions in the event of an invasion. At the same time, Russia continues to deny its intention to attack Ukraine. 

Despite the departure of investors in the assets of the «safe haven», the growth of gold is restrained by the strengthening of the dollar. The dollar is also considered a reliable asset, plus it receives support due to expectations of an imminent increase in the base interest rate of the US Federal Reserve System.

February 15. Japan's GDP growth was 5.4%, worse than forecast

In the fourth quarter of 2021, Japan's economy grew by 5.4% compared to the same period in 2020. Experts expected the growth to be 5.8%. 

The quarterly growth of the Japanese economy in October-December amounted to 1.3% compared to the previous three months – and this was the maximum growth rate for the year. Analysts had forecast the figure at 1.4%. 

In the third quarter, according to the revised data, the volume of GDP decreased by 0.7%, and not by 0.9%, as previously reported.

Business investment in the last quarter increased by 0.4%, exports increased by 1%, imports decreased by 0.3%. Government spending decreased for the first time in 3 quarters – by 0.3%.

Experts note that despite the fact that the Japanese economy returned to growth in the last quarter of last year, the increase in the incidence of Covid-19 in the first quarter of this year is likely to limit further recovery. 

It is noted that the expansion of the Japanese economy in the fourth quarter is mainly due to an increase in consumer spending by 2.7%. Costs have increased as the lifting of quarantine restrictions in Tokyo and other cities of the country since September 30 has led to a sharp increase in demand for services. It is also worth noting that in the current quarter, new quarantine measures were re-introduced, as another spike in morbidity is observed in the country.