Chinese Lunar New Year Celebrations Could Ignite COVID Outbreaks
January 10, 2023
The Chinese lunar new year starts on January 16th, and last up to 23 days and this celebration is being seen as an economic stimulus and should help energy demand. However, there are some experts that say if China opens its borders for the Lunar New year, COVID-19 cases may exponentially rise and negatively affect their economy later in 2023.
According to two sources, China issued a second batch of 2023 crude oil import quotas, raising the total for this year by 20% compared with the same time last year. According to the document from the Ministry of Commerce, 44 companies, mostly Independent refiners, were given 111.82 million tons in import quotas this round. Combined with the 20 million tons in 2023 quotas granted to 21 refineries in October, the second batch of import quotas take the total for this year to 131.82 million tons up from 109.03 million tons issued in the first batch for 2022. Crude oil bulls will see this as a bullish sign of more energy demand. There are detractors of this outlook. Some say China is importing more crude in the hope of making more refined products for export which would help their economy but wouldn’t necessarily be because of increased domestic demand. Also, if much of the crude is purchased from Russia, which is discounted below the world benchmarks of Brent and WTI crude oil, it might not mean that those crude oil grades( Brent and WTI) prices go higher.
From Reuters. Fed policymakers said fresh inflation data out on Thursday will help them decide whether they can slow the pace of interest rate hikes at their upcoming meeting, to just a quarter point increase instead of the larger jumps thy decreed for most of 2022.
Thursday’s data could easily clarify the direction of the financial and oil markets for weeks to come, said Tamas Varga of oil broker PVM.
Barclays bank has highlighted a $15 to $25 per barrel downside to its $98 per barrel Brent forecast for their crude oil forecast for 2023 if a “slump in global manufacturing activity worsens similar to the 2008 – 2009 episode”.