Oil prices plummet as U.S. considers releasing 1 million barrels of oil per day from its reserves🔻
Thursday, 31st March 2022 by Gotrade
Hey Gotraders,
Oil prices have been volatile over the last few weeks. One of the main reasons for that has been Russia’s invasion of Ukraine.
Here are some things to know.
🛢️According to the IEA, Russia is the world’s third largest oil producer behind the United States and Saudi Arabia. In January 2022, Russia’s total oil production was 11.3 million barrels per day. In comparison, the U.S. produced 17.6 million barrels per day while Saudi Arabia produced 12 million barrels per day.
🛢️They are the world’s largest exporter of oil to global markets and the second largest crude oil exporter behind Saudi Arabia.
🛢️Europe and China are 2 of the largest importers of Russian oil. About 60% of Russia’s oil exports go to OECD Europe, and another 20% goes to China.
Prices of oil are very sensitive to news that affects its demand or supply.
When Russia invaded Ukraine, prices of oil surged past $100 per barrel on concerns of supply disruptions and an energy crunch. Oil prices hit nearly $140 just a couple of weeks ago. Crazy!
When China imposed a lockdown earlier this week, prices of oil plummeted over 8% as the news prompted fears that that demand may be affected.
The price of West Texas Intermediate (WTI), the benchmark for U.S. crude, was trading between $50-$70 a barrel just 6 months ago. Today, price has more than doubled. Consumers are paying a lot more at petrol pumps for their fuel.
In an effort to reduce rising oil prices, the Biden administration is considering releasing up to 180 million barrels of oil (1 million barrels per day over 6 months) from the Strategic Petroleum Reserve (SPR). This would mark the third time the U.S. has tapped its strategic reserves in the past six months, and would be the largest release in the near 50-year history of the SPR.
President Joe Biden is expected to make an announcement on this as soon as today.
How did oil prices react? Oil prices fell over 6% overnight. Yikes!
Why is this important? Analysts are saying that there is “just no way” to fully replace Russian oil. $100 oil prices won’t go away anytime soon.
Gotrade has a whole bunch of energy stock & ETFs on our platform. If you would like to invest in them, do check out our “Commodities” category on the app.
📉 Shares of Robinhood are down over 8% ⬇️
Uh oh… Shares of Robinhood (HOOD) closed down over 8% yesterday. It could very well be due to some comments made by Morgan Stanley (MS).
An analyst from the firm said that Robinhood will need to expand its product offerings if it wanted to retain its appeal, despite having a firm grip over millennials and Generation Z.
Analysts remain bullish on Robinhood, but say that their path to success is filled with several challenges in the near term. Shareholders may not want to to stick around and wait for profitability in a high interest environment.
Morgan Stanley issued an “equal weight rating” and set a $15 price target on the stock.
Shares of Robinhood closed at $14.56, down 8.49% for the day.
📉 Visa launches NFT program 🤔
I spy with my little eye that Visa (V) is up to something! 👀
They are launching an NFT creator program so that they can integrate small businesses into the digital economy. They are of the opinion that small businesses have evolved over time to include creators and entrepreneurs who are savvy, and who want to build digital-focused companies.
“We’ve seen rapid growth in the NFT ecosystem over the past year.. We think NFTs represent a new form of e-commerce” - Cuy Sheffield, Head of Crypto at Visa.
Shares of Visa closed at $223.95, down 1.84% for the day.
Top movers & shakers 🎢
What else is making headline news 📰
Tech workers urge companies to join Ukraine's digital blockade of Russia.
France's Sanofi (SNY) 1.5 billion euro bond linked to access to medicine.
Analysis: Retail traders splurge on risky plays, fueling bounce.
China-U.S. audit dispute outcome depends on wisdom of both parties.
Demonizing Disney (DIS): Fox (FOX) and right-wing media attack the entertainment giant as 'woke' company indoctrinating kids.
MicroStrategy’s (MSTR) Saylor says markets not ready for Bitcoin Bonds.
Amazon (AMZN) union drive in Alabama sees 39% voter turnout.
Apple (AAPL) now allows video, music apps to sign up new subscribers without paying fees.
How Google (GOOG) and Amazon (AMZN) bankrolled a ‘grassroots’ activist group of small business owners to lobby against Big Tech oversight.
Meta (FB) and Sama face legal action in Kenya for alleged poor work conditions.
Popular companies releasing earnings this week 💰
Thursday: Walgreens Boots Alliance (WBA), Blackberry (BB), Nano Dimension (NNDM)
A company’s market value may fluctuate considerably around the time that the earnings report is expected to be published. Stock prices may rise or fall according to analysts' speculative estimates, released prior to the actual earnings announcement.
The earnings season can be a time of great opportunity since better-than-expected figures could cause a company’s stock to greatly increase in value. Worse-than-expected results could have the opposite effect.
That’s all from us for now.
Signing out,
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The legal stuff 🤓
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