Category: Uncategorized

Oil set to end turbulent 2022 with second straight annual gain

Oil prices rose on Friday and were on track for a second straight annual gain in a volatile year marked by tight supplies because of the Ukraine war and weakening demand from the world’s top crude importer, China.

Crude surged in March with global benchmark Brent reaching $139.13 a barrel, the highest since 2008, after Russia’s invasion of Ukraine sparked supply concerns. Prices cooled rapidly in 2022′s second half on worries about global recession.

“This has been an extraordinary year for commodity markets, with supply risks leading to increased volatility and elevated prices,” said ING analyst Ewa Manthey.

“Next year is set to be another year of uncertainty, with plenty of volatility.”

On Friday, Brent crude was down 35 cents, or 0.4 per cent, at $83.11 a barrel by 1240 GMT. U.S. West Texas Intermediate crude rose 10 cents, or 0.1 per cent, to $78.50.

For the year, Brent looked set to gain 6.9 per cent, after jumping 50 per cent in 2021. U.S. crude is on track to rise 4.4 per cent in 2022, following last year’s gain of 55 per cent. Both benchmarks fell in 2020 as the pandemic hit demand.

“Investors are going into 2023 with a cautious mindset, prepared for more rate hikes, and expecting recessions around the globe,” said Craig Erlam, analyst at brokerage OANDA.

“Volatility is likely going nowhere fast as we navigate another highly uncertain year.”

While an increase in year-end holiday travel and Russia’s ban on crude and oil product sales are supportive, supply tightness will be offset by declining consumption due to a deteriorating economic environment next year, said CMC Markets analyst Leon Li.

“The global unemployment rate is expected to rise rapidly in 2023, restraining energy demand. So I think oil prices may fall to $60 next year,” he said.

Oil’s fall in the second half of 2022 came as central banks hiked interest rates to fight inflation, boosting the U.S. dollar. That made dollar-denominated commodities a more costly investment for holders of other currencies.

Also, China’s zero-COVID restrictions, which were only eased this month, squashed demand recovery hopes. The world’s No. 2 consumer in 2022 posted its first drop in oil demand for years.

While China is expected to recover in 2023, a recent surge in COVID-19 cases has dimmed hopes of an immediate demand boost.

Chinese New Year 2023: Date Jan. 22, Year of the Rabbit

Chinese New Year 2023 will fall on Sunday, January 22nd, 2023, starting a year of the Rabbit. As a public holiday, Chinese people will get 7 days off from work from January 21st to January 27th in 2023.

https://www.chinahighlights.com/travelguide/festivals/when-chinese-new-year.htm

TSX Closed Dec 27

2023 Stock Market Holidays – Market Closed

UK woman arrested for praying near abortion center warns more arrests may come

A British woman arrested near a Birmingham, England abortion center for praying, under a new protest prohibition statute, told Fox News she fears her situation will not be the last in the U.K.

On “Tucker Carlson Tonight,” Isabel Vaughan-Spruce said she has long engaged in silent prayer outside clinics, saying dozens of women have accepted her offers of help and go on to continue their pregnancies rather than terminate them as-planned.

She explained to host Tucker Carlson how the anti-protest policy has since been used to include similar behavior at abortion centers.

“In September this year, the local council in Birmingham brought in this censorship zone, this PSPO – formerly these were used for dog fouling and drunken behavior and things like that,” Vaughan-Spruce said. “But they’re now popping up around the country surrounding abortion centers, and they banned behavior like protesting, but it also names prayer and counseling as forms of protesting.”

https://www.foxnews.com/media/uk-woman-arrested-praying-abortion-center-warns-more-arrests

China grapples massive COVID wave with full emergency wards and crowded crematoriums: ‘Many people dying’

Experts have forecast China will eventually experience a million to 2 million deaths over 2023

China’s ongoing battle with a COVID surge has completely devastated the country’s healthcare infrastructure, especially in the Hebei province.

Hospitals in Baoding and Langfang have been forced to turn away ambulances and ill patients seeking treatment, while health administrators have been required to treat patients in over-capacity intensive care units on benches or the floor, officials said.

“I don’t have much hope,” said Yao Ruyan, whose elderly mother-in-law requires urgent medical care as she contracted the coronavirus. However, Yao has been unable to find a hospital with room to treat her, the Associated Press reported.

https://www.foxnews.com/world/taiwan-scrambles-jets-readies-missile-defenses-chinese-vessels-near-island-defense-ministry-says?utm_source=spotim&utm_medium=spotim_conversation&spot_im_redirect_source=notifications&spot_im_comment_id=sp_ANQXRpqH_urn%243Auri%243Abase64%243A4bfd7982-5095-5cc8-bd7d-24da4edc8770_c_2JMLWXCxDJ1646e0ByrVL5kkkOE_r_2JMMUgTHqDrXyxAFewnnLharBrN&spot_im_highlight_immediate=true

Taiwan scrambles jets, readies missile defenses as Chinese military vessels near island, defense ministry says

Several Chinese aircraft and naval vessels neared Taiwan early Saturday morning, prompting the Taiwanese defense ministry to scrambled fighter jets and ready its missile defense system, officials said.

The Ministry of National Defense for the Taiwan government, officially identified as the Republic of China, said its forces detected over a dozen vehicles operated by China’s military near its island at approximately 6 a.m. Saturday.

“11 PLA aircraft and 3 PLAN vessels around Taiwan were detected by 6 a.m. today,” its government said, prompting officials to send naval vessels of their own and ready land-based missile systems “to respond to these activities.”

https://www.foxnews.com/world/taiwan-scrambles-jets-readies-missile-defenses-chinese-vessels-near-island-defense-ministry-says

TC Energy receives regulatory approval to restart part of Keystone pipeline shut by spill in Kansas

TC Energy Corp. TRP-T +2.33%increase has received regulatory approval to restart the remaining segment of the Keystone pipeline that has been shut down since suffering its worst oil spill in the pipeline’s history on Dec. 7.

The Calgary-based company said Friday the U.S. Pipeline and Hazardous Materials Safety Administration has approved a restart plan for the 154-km stretch of pipeline that runs from just south of Steele City, Nebraska to Cushing, Oklahoma.

The company said its restart plan will take several days and will include rigorous testing and inspections. It did not provide a date for when the entire pipeline system will be fully operational again.

Immediately following the spill, which saw 14,000 barrels of oil released into a creek in Washington County, Kan., TC Energy shut down the Keystone pipeline system, which stretches 4,324 km and helps transport Canadian and U.S. crude to markets around North America.

TC Energy restarted most of the pipeline, at a reduced pressure, on Dec. 14, although the section that runs from just south of Steele City, Nebraska to Cushing, Oklahoma remained shut down.

TC Energy and U.S. regulators are still investigating the cause of the spill, which eclipsed a 2017 6,600-barrel spill in North Dakota and a 2019 4,500-barrel spill in South Dakota as the worst oil spills in the Keystone pipeline’s history.

The 2017 spill, in particular, was a blow to the Canadian oil industry. For the 10 days the pipeline was shut down, a lack of transportation capacity both to the U.S. storage hub in Cushing, Okla. and to refiners along the U.S. Gulf Coast caused a backlog of Canadian crude and forced producers to sell barrels at an increased discount.

That price depreciation didn’t happen this time, however – in part because Canada now has more pipeline capacity than it did. (The addition of Enbridge’s Line 3 replacement project came online in 2021, and Canada will have even more pipeline capacity next year after the TransMountain expansion project comes online.)

But Rory Johnston, a Toronto-based oil markets analyst and founder of the Commodity Context newsletter, said even with that additional capacity, any future pipeline outages that last for more than a few weeks could still cause significant problems.

“The Keystone outage reminds us of our vulnerability,” Johnston said in a Dec. 21 interview.

“All of our pipelines (in Canada) are pretty large pipelines. We don’t actually have that many pipelines. So if anything goes wrong with any one of those assets, we don’t actually have a lot of resiliency in the system. And I think that’s what Keystone has showed us.”

Pipelines are widely considered by experts to be a safer mode of crude transport than either rail or truck. Still, the risk of a spill has long been a factor cited by environmentalists and others who have opposed North American pipeline construction projects in recent years.

For example, fears about potential pipeline leaks (as well as concerns about climate change) helped stoke opposition to TC Energy’s proposed Keystone XL extension. That project would have cut across Montana, South Dakota and Nebraska but ultimately had its permit cancelled by U.S. President Joe Biden in 2021.

U.S. government data shows that the Keystone pipeline’s safety record has been deteriorating in recent years.

A report released last year from the U.S. Government Accountability Office (GOA), a congressional watchdog agency, said Keystone’s accident history has been similar to other crude oil pipelines since 2010, but the severity of spills has worsened in recent years.

The GOA report identified “construction issues” leading to the material failure of pipe or welding material as a leading factor in past Keystone accidents.

It said the 2017 Keystone leak was caused by issues in the construction, installation, or fabrication of the pipeline, while the 2019 North Dakota accident was caused by defects in the original pipe manufacturing.

Investors look for ‘Santa Rally’ after grim year in U.S. stocks

Bruised investors are hoping a so-called Santa Claus rally can soften the pain of a tough year in U.S. stocks and potentially brighten the outlook for 2023.

Without a doubt, the market could use some holiday cheer. In December – typically a strong month for equities – the S&P 500 has so far lost around 6%, weighed down by hefty declines in shares of Tesla Inc, Amazon.com Inc and other names that had led markets higher in previous years. The index is down nearly 20% year-to-date and on track for its worst annual performance since 2008.

History shows the market still has a better-than-average chance to pare those losses. U.S. stocks have risen during the last five trading days of December and the first two days of January about 75% of the time, CFRA Research data showed, a pattern attributed to low liquidity, tax-loss harvesting and investing of year-end bonuses.

Friday is this year’s start date for this rally named after Santa Claus – if it happens. It will only be clear around the second trading day of 2023.

The phenomenon has lifted the S&P 500 an average of 1.3% since 1969, according to the Stock Trader’s Almanac. A December without a Santa rally has been followed by a weaker-than-average year, data from LPL Financial going back to 1950 showed.

The S&P 500 has gained an average of 4.1% in the year after a December without a Santa rally, compared to a 10.9% gain following a period when one takes place. January gains are also muted in a non-Santa year, with the index falling an average of 0.3% compared to a 1.3% gain after a Santa year, the data showed.

“When Santa Claus doesn’t arrive that typically means that there’s something in the market that is causing confusion or an obstacle that it is facing. Negative sentiment doesn’t change because it’s a new year,” said Keith Lerner, co-chief investment officer at Truist Advisory Services.

This month’s steep decline underscores how seasonal trends seem to be offset by worries over whether the Federal Reserve’s monetary tightening will plunge the economy into recession.

The S&P 500 has posted only 18 Decembers with losses since 1950, Truist Advisory Services data showed. The index has gained an average of 1.6% in December, the highest of any month and more than double the average 0.7% gain of all months, according to CFRA data.

This December is shaping up to be one of the exceptions. Investors shed stocks at the highest weekly rate ever in the week to Wednesday, selling a net $41.9 billion, according to a BofA Global Research report on Friday. It attributed the sell-off to “tax loss harvesting,” a strategy that involves selling assets at a loss to offset capital gains taxes.

“The lack of a ‘Santa Claus rally’ this month, with a ‘lump of coal selloff’ in its place, is a troubling sign about 2023 US equity returns,” strategists at DataTrek wrote.

Few economic reports are due next week, with readings on the U.S. housing market and jobless claims, while stock market liquidity is expected to fall near its lowest levels of the year with many on Wall Street off for the holidays.

Much of the market’s trajectory will be dictated by whether inflation can continue to subside and allow the Fed to stop raising interest rates sooner than it has projected.

U.S. consumer spending barely rose in November, while annual inflation increased at its slowest pace in 13 months, but demand is probably not cooling fast enough to discourage the Fed from driving interest rates higher next year.

Other inflation measures have also shown signs of slowing, with consumer prices rising less than expected for a second straight month in November.

“If investors start to see the economy slowing more rapidly than people are anticipating and the Fed ends its rate hikes in the first quarter, we could see a tale of two halves” and a strong positive return next year, said Sam Stovall, chief investment strategist at CFRA.