Sokol Oil from Russia Encounters Delays on Tankers During Transit to India.

Energy

Economic

Summary:

Deliveries of Sokol oil from Russia to India have faced significant delays, with five oil tankers affected by the disruptions. The United States has imposed sanctions on certain tankers owned by Russia's Sovcomflot, preventing the timely transport of nearly five million barrels of Sokol grade crude to Indian refiners over the past four weeks. Despite the scheduled deliveries, the tankers remain idle, some for over a month, lingering miles away from their intended destinations.

Deliveries of Sokol oil from Russia to India are experiencing substantial delays, impacting five oil tankers due to disruptions. The root cause of the delays appears to be the imposition of US sanctions on specific tankers owned by Russia's Sovcomflot. These sanctions have hindered the timely transportation of nearly five million barrels of Sokol grade crude to Indian refiners over the past four weeks. Despite the scheduled deliveries, the affected tankers remain inactive, some stranded for over a month, far from their intended destinations. While the exact reasons for the delays are unclear, US sanctions targeting tankers transporting Russian crude in violation of price caps set by the Group of Seven nations may contribute to the issue.

The US Treasury initiated sanctions in mid-October, initially targeting two ships connected to the Russian oil trade. Subsequent sanctions in mid-November and early December expanded to include a total of eight vessels, six of which are owned by Russia's state tanker company Sovcomflot PJSC. Notably, the NS Century, one of the sanctioned vessels, carrying Sokol crude to the Indian port of Vadinar, has been halted south of Sri Lanka since November 16. Two additional Sovcomflot tankers, also en route to Vadinar with Sokol crude, have joined the NS Century in idleness. This disruption extends beyond Vadinar, affecting three tankers destined for the port of Paradip on India's east coast.

Among the affected vessels near Paradip, the Krymsk has been stationary about 275 miles from the port since December 4, joined later by the Nellis. Another vessel, the Liteyny Prospect, is approaching the region. These tankers, collectively carrying about 700,000 barrels each of crude from Sakhalin Island fields in Russia's Far East, contribute to the broader challenges faced by Sovcomflot. However, amidst the disruptions, one Sovcomflot-owned tanker managed to complete loading on December 19 and is en route to Vadinar, expected to arrive on January 5.

The impediments in Sokol oil deliveries to India underscore the impact of geopolitical factors on global oil trade dynamics. The sanctions on Sovcomflot-owned tankers disrupt a significant portion of crude supply, leaving lingering uncertainties in the market.

Source: Bloomberg

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Ukadike Micheal

Economic

In a surprising turn, November saw an unexpected 0.8% increase in US pre-owned home sales, offering respite from a two-year downturn, particularly in the South. Contract closings reached a 3.82 million annualized rate, still near 2010 lows, surpassing the Bloomberg survey forecast of 3.78 million. However, purchases were down 7.7% from the previous year. Higher borrowing costs and elevated prices hampered the resale market, though declining mortgage rates provide hope for a rebound in the coming months. The median selling price rose by 4% to $387,600, and the tight inventory situation persists with 1.13 million homes available.

In a deeper analysis, sales rose in two of four regions, notably by 4.7% in the South. Single-family home sales increased by 0.9%, while first-time buyers constituted 31% of purchases. Cash sales represented 27% of total sales, with investors making up 18% of the market. The median selling price increased by 4%, reaching $387,600, and homes stayed on the market for an average of 25 days in November.

Despite challenges, Lawrence Yun, NAR's chief economist, anticipates a turnaround, stating that home resales likely reached their cyclical low point. However, a meaningful recovery may take two or three months. As mortgage rates have recently decreased, there's optimism for a positive shift in the housing market, emphasizing the potential for a brighter outlook in the near future.

Source: Bloomberg

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Ukadike Micheal

Economic

Finance leaders in the United States are preparing for a slight uptick in debt refinancing costs in the years 2024 and 2025, according to a survey conducted by Duke University and the Federal Reserve Banks for Richmond and Atlanta. Chief financial officers (CFOs) participating in the survey project a 120-basis-point increase in 2024 and a subsequent 70-basis-point rise in 2025 for the process of rolling over their debt, compared to the initial financing rates. While acknowledging the potential strain that may arise from higher interest rates, CFOs express optimism, anticipating a subsequent moderation in interest rates.

The survey, which encompassed responses from 443 finance executives at both public and private companies across the nation, sheds light on CFOs' primary concerns. Approximately 25% of respondents listed monetary policy as a significant worry, alongside concerns about the availability and quality of labor. This is a slight decline from the prior year when 31% expressed such concerns. Despite worries about the impact of interest rates, recent trends in borrowing costs show a positive trajectory, with the cost of capital experiencing a notable decline of nearly 20% over the past two months, settling at 5.18% from its high of 6.43% in October, according to data compiled by Bloomberg.

The survey period, which spanned from November 14 to December 1, predates comments from Federal Reserve Chair Jerome Powell highlighting the potential for 75 basis points in rate cuts in 2024. Nevertheless, the survey underscores that monetary policy remains a critical focus for finance chiefs.

John Graham, Professor of Finance at Duke’s Fuqua School of Business and director of the CFO survey, noted that while there may be some strain on companies due to higher interest rates, there is an overall expectation for moderation. He expressed relief that CFOs did not anticipate significantly higher refinancing costs, stating, "I was worried that CFOs would say they expect their refinancing costs for 2024 to be 300 or 400 basis points higher, but they didn’t."

Despite lingering concerns, the survey offers a more optimistic outlook for the new year compared to the fourth-quarter survey of 2022. CFOs rated their expectations about the performance of the US economy at 58, up from 53 a year ago but still below the historical average of about 60, according to Graham. The positive sentiment is further reflected in the anticipation of 2.7% employment growth in 2024, an increase from the 2.2% forecast for 2023. Additionally, median revenue growth is expected to remain steady at 5%.

Looking at specific economic indicators, the survey reveals expectations for a slowdown in median price and unit cost growth to 3% and 4%, respectively, down from their previous 5% levels. This nuanced forecast suggests that while there is optimism, there is also a recognition of potential challenges in specific sectors.

The survey signals a measured concern about near-term refinancing costs among CFOs, underscoring the potential impact of interest rate changes. However, the overall tone remains cautiously optimistic, with finance leaders expressing confidence in a positive economic trajectory for 2024. The data indicates a balancing act between acknowledging challenges and embracing the potential for growth in the coming year.

Source: Bloomberg

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Chandan Gupta

Stocks

During the last trading session, the S&P 500 index showed new signs of strength, highlighting continued bullish pressure in the market.

Currently, traders are in the middle of the so-called "Santa Claus Rally," a phenomenon in which market participants try to improve their performance at the end of the year. This rally is clear evidence that the market is currently dominated by this sense of seasonality, and that tracking earnings is becoming the norm as the end of the year approaches.

Nevertheless, the pressing question for many investors is how long this impressive rally will continue. As the market approaches the 4750 level, it becomes increasingly important to consider the possibility of profit taking, and if profit taking occurs, it is likely to be swift and relentless.

This possibility can arise suddenly in markets characterized by reduced liquidity. It is important to remember that Monday is Christmas Day and the majority of market participants are already focused on the Christmas holidays. Currently, the market is mainly made up of people who want to reduce their positions or restore their annual performance.

Technical Levels

An important support level to watch is the 4500 level, with the 50-day exponential moving average nearby.

While a rapid decline to this level is not expected or imminent, it could be an attractive entry point for companies looking to participate in the market. Chasing the market at its current high levels is a strategy with significant risks, and has caused some investors, including myself, to refrain from investing over the past 10 days.

After all, there are many issues that can cause concern in the market. Overall, this market will continue to be noisy, but I think it's safer to wait and see for now.

After all, the S&P 500 continues to show resilience and strength against the backdrop of the year-end "Santa Claus Rally" While the trend towards volatility in the market is clear, it is worth noting that over time we may see a scenario where buyers re-enter the market after the new year.

Investors would be wise to remain cautious and vigilant as they navigate the twists and turns of this seasonally changing market environment.

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Chandan Gupta

Cryptocurrency

Bitcoin withdrawn indeed as financial specialists grasped a risk-on assumption amid the American session. The US dollar record withdrawn to $101.77 whereas the 10-year and 30-year bond yields dropped to 3.92% and 4.03%, separately. The CBOE VIX list, which could be a well-known fear guage in Divider Road dropped by 1.5% to $12.37.US values too bounced back, with the Dow Jones rising by over 200.

The tech-heavy Nasdaq 100 and S&P 500 records rose by more than 0.50%. In most cases, Bitcoin tends to move within the same course as US values.The greatest Bitcoin story of this week was that Blackrock recorded an revision to its spot Bitcoin ETF in a offered to conciliate the Securities and Trade Commission (SEC). The modern revision will see the company set cash recovery and creation components in a offered to secure customers.

The SEC has long supported the recovery component. In this manner, there's a probability that it'll favor the spot ETF within the another few weeks or months. In a later explanation, Gary Gensler famous that the organization was looking into the later Grayscale claim to decide whether it'll favor the ETFs.Bitcoin has revived within the past few months as speculators expected future rate cuts and ETF endorsements.

The Encouraged has already indicated that it'll cut rates in 2024. The following catalyst for the coin is the developing advertise share for Bitcoin Ordinals and following year's dividing.Bitcoin Ordinals have gotten to be so effective that they have surpassed Ethereum NFTs in terms of deals.

BTC/USD Technical Analysis

Bitcoin prices fell to a low of $40,000 last week and are struggling to recover.This attempt encountered strong resistance at $43,476 and has struggled to rise since December 13th.

Bitcoin is also holding steady in its 25 and 50 period moving averages, with its Average True Range (ATR) remaining flat as ATR is one of the most popular volatility indicators.

Therefore, the BTC/USD pair is likely to remain between the support at 40,000 and the resistance at 43,476.A breakout above the resistance at 43,476 opens the possibility of a rally to the previous high of 44,970.

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Warren Takunda

Cryptocurrency

Despite recent hype surrounding Bitcoin and spot exchange-traded funds (ETFs_, JPMorgan believes that Ethereum will outperform Bitcoin in 2024.

In a Dec. 13 report, JPMorgan analysts wrote, "We believe that next year Ethereum will reassert itself and recapture market share within the crypto ecosystem."

The analysts reason that the Ethereum EIP-4844 upgrade, also known as the Proto-Danksharding upgrade, is expected to take place during the first half of 2024 and is part of a multistep plan to make sharding more efficient on the Ethereum chain.

Though the process is complex, the idea is that it will allow shards to be analyzed in larger groups instead of a system that splits Ethereum into several shard chains. This upgrade will have a significant impact on Layer 2 solutions such as Polygon and Optimism. This is because it will allow these projects to have more access to network power, which will increase throughput and reduce transaction costs.

JPMorgan believes that these upgrades will bring more investors to Ethereum and cause it to regain market share in the crypto sphere.

JPMorgan is not saying that the price of Ethereum will appreciate. The analysts are "cautious" about crypto markets in 2024. They see Ethereum as one of the stronger tokens for 2024. While it may not go up in price, they still believe that it will perform better than other tokens, specifically Bitcoin.

Despite recent hype around spot Bitcoin ETF approvals and the upcoming Bitcoin halving, JPMorgan is still more bullish on ETH. The analysts believe that the spot Bitcoin ETFs are already priced in. Since approval seems imminent, they believe that markets have already priced in the impact this will have on Bitcoin. They cite the recent Bitcoin run-up as evidence for this.

They also think that the upcoming Bitcoin halving is already priced in. They looked at the ratio of Bitcoin's market price to production cost and saw that it decreased after the most recent halving in 2020. They expect a similar move will follow in 2024.

Other topics discussed in the report revolved around their lack of confidence in decentralized finance (DeFi). They have not seen noticeable impacts of DeFi on the current financial system.

"The biggest applications of blockchain to traditional finance, i.e. overnight repo transactions via smart contracts in blockchain platforms hosted by companies such as Broadridge and JPMorgan, take place outside public blockchains," the analysts said. They also discussed interoperability and central bank digital currencies.

Source: Benzinga

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Chandan Gupta

WTI Crude Oil

Within the domain of vitality commodities, the Rough Oil markets seen a rollercoaster ride amid the later exchanging session. In spite of the fact that costs at first plunged, decided buyers quickly developed, underscoring the persistent bullish connotation within the advertise. This slant is symbolic of the loud and unusual behavior that has gotten to be the trademark of Unrefined Oil exchanging, advance compounded by a intersection of components concurrently affecting the advertise.

One noteworthy calculate contributing to the progressing showcase elements is the predominance of brief covering exchanges. Dealers who had already wagered on lower costs have repositioned themselves, capitalizing on the opportunity to bolt in benefits. As we approach the occasion season, a decrease in advertise liquidity is expected, possibly intensifying the commotion and instability in Unrefined Oil costs. Fair over the $75 level, a mental limit, and the 50-Day Exponential Moving Normal stand as impressive resistance focuses, likely to challenge any upward development. Then again, solid bolster levels hold on underneath, implying that it may as it were be a matter of time some time recently buyers seize the opportunity to obtain "cheap oil," in this manner starting a union stage.

Brent

Like its West Texas Middle of the road partner, the Brent Rough showcase moreover experienced a slight pullback amid the later exchanging session. Much like WTI, Brent hooks with the imperatives of reduced liquidity and brief covering elements. The mental centrality of the $80 level looms overhead, and the 50-Day EMA debilitates a bearish plummet. Be that as it may, underneath the surface, a bedrock of back remains intaglio, implying at the plausibility that oil markets were, in reality, oversold at first. It shows up that the showcase is presently balanced for a potential bounce back, secured by a long-standing back level that dealers have reliably depended upon.

Within the conclusion, the Rough Oil markets are exploring misleading waters characterized by instability and brief covering exercises. Whereas the prospect of a recuperation looms on the skyline, the street ahead is likely to be full with turns and turns. Financial specialists are prompted to work out caution and stay adjusted to the evolving market sentiment, because it is evident that caution will be a judicious approach in this environment. I do think that inevitably we seem see upward energy longer-term, but that's a story for January from what I see. I have no intrigued in getting huge in a position at this point, as following week will see the markets dry up.

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