What's happening:
The unusually sharp pullback has been driven by hopes that Saudi Arabia and the United Arab Emirates could boost oil production, and that demand from China could drop due to new coronavirus restrictions in major cities. This would ease the squeeze on the market.
But it's clear that investors remain unsettled as they process the effects of Russia's invasion. Russian oil is still being priced at a huge $26 discount to Brent.
And analysts believe the direction of travel has been set. Giovanni Staunovo, an analyst at UBS, expects oil to trade at $125 per barrel by the end of June. For his part, Tonhaugen of Rystad Energy thinks prices could still smash records as the conflict plays out.
"This is the quiet before the storm," he said.
The sell-off in Chinese stocks is getting deeper
Investors have been racing to dump stocks in Chinese companies as worries grow about the consequences of a crackdown from regulators and a spike in Omicron cases. Whether Beijing could provide support to Russia, and be punished by the West for doing so, is adding to the fear.
"There may be growing caution over the potential for secondary sanctions on China," TD Securities strategist Mitul Kotecha told clients.
https://www.cnn.com/2022/03/15/investing/premarket-stocks-trading/index.html
The unusually sharp pullback has been driven by hopes that Saudi Arabia and the United Arab Emirates could boost oil production, and that demand from China could drop due to new coronavirus restrictions in major cities. This would ease the squeeze on the market.
But it's clear that investors remain unsettled as they process the effects of Russia's invasion. Russian oil is still being priced at a huge $26 discount to Brent.
And analysts believe the direction of travel has been set. Giovanni Staunovo, an analyst at UBS, expects oil to trade at $125 per barrel by the end of June. For his part, Tonhaugen of Rystad Energy thinks prices could still smash records as the conflict plays out.
"This is the quiet before the storm," he said.
The sell-off in Chinese stocks is getting deeper
Investors have been racing to dump stocks in Chinese companies as worries grow about the consequences of a crackdown from regulators and a spike in Omicron cases. Whether Beijing could provide support to Russia, and be punished by the West for doing so, is adding to the fear.
"There may be growing caution over the potential for secondary sanctions on China," TD Securities strategist Mitul Kotecha told clients.
https://www.cnn.com/2022/03/15/investing/premarket-stocks-trading/index.html
