Dow pulled back 365, decliners over advancers better than 3-1 & NAZ retreated 139. The MLP index was off 2+ to the 213s & the REIT index fell 6+ to the 366s. Junk bond funds drifted lower & Treasuries had a little selling, raising yields. Oil slid back to the 78s & gold declined 10 to 1812 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
After a year of high inflation and market volatility, gas prices are expected to fall
in 2023, although summer travel could still push prices into the $4 per
gallon range as soon as May, according to a new forecast. GasBuddy, an app that provides real-time gas price information,
released 2023 projections that suggest Americans should expect some relief at the pump
at the start of next year. The yearly national average price is
forecast to drop nearly 50¢ per gallon from that of 2022 to $3.49, the report states. Fuel prices broke record highs in 2022 because of the lingering effects of COVID-19 policies
that shut down crude oil refineries – limiting oil production – &
disruptions in intl trade related to the Russian invasion of
Ukraine. With the world moving on from the pandemic, global refining
capacity is expected to rise, which will alleviate the decline in US
supply of gasoline, diesel & jet fuel. Gas
is expected to hover around an average low of $3 per gallon in Jan & Feb, when demand is seasonally low. However, moving into the
spring & summer, prices may rise as high as $4 when drivers hit the roads & enjoy the pleasant weather. By the end of the year, prices should decrease again as that demand subsides. "2023 is not going to be a cakewalk for motorists. It could be
expensive. The national average could breach $4 a gallon as early as May
– and that’s something that could last through much of the summer
driving season," said Patrick De Haan, the head of petroleum analysis
for GasBuddy. "Basically, curveballs are coming from every
direction. Extreme amounts of volatility remain possible, but should
become slightly more muted in the year ahead," he added. "I don’t think
we’ve ever seen such an amount of volatility as we saw this year, and
that will be a trend that likely continues to lead to wider uncertainty
over fuel prices going into 2023."
Gas prices could rise back to $4 per gallon as early as May 2023, Gasbuddy says
BlackRock founder and CEO Larry Fink & Ukrainian Pres Volodymyr Zelenskyy met virtually to discuss
ongoing plans for rebuilding the war-torn nation, Kyiv announced. Zelenskyy's office issued a press release showing him & Fink,
saying the 2 "agreed to focus in the near term on coordinating the
efforts of all potential investors and participants in the
reconstruction of our country, channeling investment into the most
relevant and impactful sectors of the Ukrainian economy." The announcement also said that "during the conversation, it was
emphasized that certain BlackRock leaders plan to visit Ukraine in the
new year." Ukraine's office of the pres noted the talks were
the latest between the country & the world's largest investment firm,
as part of earlier agreements reached months ago. Fink & Zelenskyy held a virtual discussion back in Sep to
discuss how BlackRock Financial Markets Advisory division "could provide
pro bono advice to the Ukrainian gov on setting up a reconstruction fund in support of the recovery of the Ukrainian economy," the gov said at the time. The
World Bank estimated in Sep that the current cost of
reconstruction & recovery in Ukraine amounts to $349B, with the
figure continuing to grow as the war continues. BlackRock reported last month that its FMA group and the Ministry of
Economy of Ukraine signed a Memorandum of Understanding (MoU) that
formalizes the earlier discussions. The MoU aims to create
opportunities for both public & private investors to participate in
the future reconstruction & recovery of the Ukrainian economy. As part
of the agreement, BlackRock will advise on establishing a roadmap for
the investment framework's implementation, including identifying design
choices for the envisioned setup, structure, mandate & governance.
Ukrainian tycoon arrested in French ski resort in bank probe
Russia's announcement of an oil export ban on countries that abide by a G-7 price cap is the latest sign that we've entered a new era for global energy markets, according to analysts. But they also note it's unlikely to have a short-term impact on oil prices, with markets taking their cues from data & concrete actions rather than words. The price cap was introduced on Dec 5 & requires traders using Western services such as maritime routes, insurance & financing to pay no more than $60 per barrel for seaborne Russian oil. Urals crude is currently trading around $50 per barrel, according to Finnish refining firm Neste. Pres Vladimir Putin's decree said that from Feb 1 it would stop crude oil & oil products for 5 months to any nation that adhered to the cap, with a separate ban on refined oil products to come. Dan Yergin, vice chair of S&P Global, said yesterday that despite skepticism over whether the program would work, leaders had found a way to keep oil flowing into the market while reducing Russian oil revenue. But as a result, he said, we now have a “divided, more politically charged oil market.” For the last 30 years, since the collapse of the Soviet Union, we've had a global market in which oil has pretty much moved around based on the economics, exceptions were Iran and Venezuela. “But now we have what I call a partitioned oil market in which Russian oil can no longer go to its largest market, which is Europe, and the markets have been divided and that oil is now flowing east.” European countries have been scrambling to find alternative sources of oil & gas and new energy security solutions following Russia's unprovoked invasion of Ukraine in Feb. The EU got 14.4% of its petroleum oils> from Russia in Q3-2022, down 10.5 percentage points year on year, as it increased imports from the US Norway, Saudi Arabia & Iraq.
Putin attempts to undermine oil price cap as global energy markets fracture
Gold prices ended lower, retreating from their highest level since Jun in the previous session but remained above $1800 per ounce, which is a sign that a week-long bull run remains intact. Gold futures for Feb fell $7 to settle at $1815 per ounce. While the yellow metal finished modestly lower today, analysts pointed out that gold prices still remain well above the $1800 per ounce level. Below that level, gold bulls might start to lose confidence that the recent rally in the yellow metal can continue. Gold prices continue to trade above the critical support of 1800, a level that is closely watched by both bulls & bears because traders believe that as long as the price continues to trade above this price point, the price action is more likely to move in the right direction. The ICE US Dollar Index, a gauge of the dollar's strength against a basket of major currencies, rose 0.1% at 104.30.
Gold prices end lower, but still above $1,800 level after hitting six-month high
Oil sustained losses as the $ ticked higher & equity markets erased gains, easily swayed by broader market swings amid thin liquidity. West Texas Intermediate fell below $79 a barrel after closing at a 3-week high earlier this week. Gains were driven by China's determination to continue easing restrictions even as Covid infections there soar. Volatility was also heightened after the Kremlin said this week it would ban exports of Russian crude oil & refined products to foreign buyers that adhere to a price cap. Crude is still set for a modest gain in 2022 after a volatile year that saw prices surge following Russia's invasion of Ukraine & then gradually pull back as fears of a global slowdown grew. China's rapid unwinding of its strict Covid Zero policy & a resulting wave of virus cases have hit a market that’s prone to sharp swings due to a lack of liquidity.
Oil Falls From Three-Week High As Wall Street Slumps
Another dreary day for the stock market. Higher interest rates & the looming recession weigh on the minds of many investors. And the Dow continues in its sideways trend as it has for 2 months. Ugh!!
Dow Jones Industrials
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