War Continues to Impact Energy Resources – Closing Bull April 8th, 2022

Quick Summary:

In this week’s Closing Bull, we’ll be discussing news on Federal Reserve Governors expecting a rapid stimulus to the economy, the war between Ukraine and Russia continues to impact the gas and energy trade for countries, Shell Oil expects to take a $5B hit from its Russia exit, Western oil companies cut back on their Russian exposure, the West is under force to push more sanctions on Russia, China extends its lockdown of Shanghai indefinitely, and last but not least, an interesting fact to close off the week.

Let’s get into the news!

Key News This Week:

Market recap

Feds expecting rapid stimulus for the economy

The war between Ukraina and Russia continues to impact gas and energy for countries

Shell Oil expecting a $5B hit on exit from Russia

Exxon looks to have record profits this year

Western oil companies cut back on Russian exposure

The West is being forced to push more sanctions on Russia

China extends its lockdown of Shanghai indefinitely

Interesting fact

Read the Transcript

Hi and welcome to my financial markets’ re-cap for the week.

It was a choppy week this week as we entered a trade on Friday last week and closed out a small loss today. 

Boo hiss, I hate losing trades, but they are part and parcel. We already know historically we are only right 70% of the time, so we dust ourselves down and get ready for the next one. 

There are still a lot of uncertainties for the market due to the ongoing war in Ukraine, but May is looking very bullish from our cycle projections, so perhaps there will be some good news on that front coming.  We can only hope.

So that was the system update, now what happened in the news this week?

The market got off to a bullish start on Monday but quickly faded on comments from a couple of Federal Reserve Governors saying that they were expecting a more rapid decrease in stimulus to the economy than the Fed has currently outlined and that the central bank was committed to fighting inflation.

So, when the fed minutes were released on Wed at 2 pm this week, (these are the notes from the last meeting 2 weeks prior) the market was ready for the bad news. However, it seems that the minutes of the meeting only talked about a modest reduction being done in stages. 

This seemed to cheer the market up and it has been somewhat stable these last 2 days of the week.

Back to the elephant in the room – The War in Ukraine

It was reported that Lithuania has cut ties to Russian Gas this week, having planned on not being beholden to their neighbours for energy reliance for almost 10 years.

Germany admitted it did not do so well in this planning and is now scrambling for ways to stop the flow without it leading to shortages.

Shell Oil expects to take a $5B hit from its Russia exit. The write-down is a first look at the impact the war in Ukraine is having on Western oil companies as they cut back on their Russian exposure. It was also reported that Exxon will have record profits this year due to the increase in oil prices, however, will need to write down abandoned projects in Russia.

The news today of the strikes on the train station and the previous reporting of the aftermath of the city of Bucha, are forcing the west to come up with further and even more comprehensive sanctions against Russia. So, that is obviously ongoing. We can only hope for an end to this horrible conflict, and the sooner the better.

This week China extended its lockdown of Shanghai indefinitely, forcing its 26M residents to stay home. China’s “zero-Covid” crackdown is slowing its economy and snarling global supply chains. 

Lastly, an interesting fact:

Uber users in the UK will be able to book trains, buses, car rentals, and even planes as Uber strives for “super-app” status. The pilot program could take flight in other countries too. A very interesting development for the company.

That’s it from me, It’s Friday, time to down tools, thanks for watching, and bye for now.