BlackMask Breaking News

The “shadow fleet” of ships that transport Russian oil around the world has expanded to around 600 tankers, according to trading giant Trafigura. About 400 crude oil vessels, or 20% of the global fleet, have “switched” from mainstream trades to “ostensibly do Russian business,” co-head of oil trading Ben Luckock said in an interview on Bloomberg Television. For oil product tankers, the company sees the level at 200 tankers, or 7% of the world total. “You had the old days of Iran and Venezuela, and there was a shadow fleet that was relatively small — it would manage the sanctioned barrels,” Luckock said. “This Russian flow is vastly different – it’s huge.” The European Union will ban almost all seaborne imports of Russian refined fuels from Sunday, two months after imposing a prohibition on crude oil. The measures will come in conjunction with a cap on the price of Russian petroleum for anyone wishing to access key western services like insurance. The ban will eventually lift crude and products prices as shipping mileages increase and routes take longer, Luckock said. “There’s a lot of people talking about how they can be clever and get rid of Russian oil. But it is a vast volume that needs to find a new home,” Luckock said. “I think in the early days maybe that’s okay, but as time progresses there will be difficulties in the products markets.” Oil prices have edged lower this year amid robust Russian production and weaker-than-expected Chinese crude demand. Many buyers and shippers remain willing to do business with Moscow despite tightening international sanctions. Brent crude futures traded near $80 a barrel in London on Friday. Crude will trade in a range of $80 to $100 barrel, heading above $90 this summer as Chinese demand recovers, though futures may struggle to break triple-digits, Luckock said. “We are building a deep inefficiency into an oil market that has spent decades becoming incredibly efficient,” Luckock said. “This will get worse over time.” Trafigura is doing “very little” Russian oil-products business, in line with current regulations, but the company — which is one of the world’s biggest commodity traders and until recently had investments in projects with Russia’s Rosneft PJS — will be keeping an eye on what the EU announces on Sunday. “We’ve got a group of compliance people and lawyers waiting to see what the rules are,” he said. NN: the oil market is under supplied and in turmoil. Distribution of oil and distillates is a very complicated business. No one knows the new rules. No one understands how record breaking demand for oil and sanctions will work. Or better put not work. The same people that banned oil drilling and pipelines and legislated technologies they were not ready for prime time are now writing sanctions laws. They do this with little understanding of how the oil market works. Janet Yellon Treasury sectary took a victory lap on sanctions the US and EU rammed through, With no understand that in the middle of a energy crises they are cutting off supplies to Europe. All this on a lick and a prayer that something will happen and all this will work out in the end…

Oil prices fell to over three-week lows on Friday in a volatile session,the spin is strong U.S. jobs data raised concerns about higher interest rates. REALITY IS THE WORLDS LARGEST OIL TRADING PLATFORM ION WAS HACKED BY THE RUSSIANS

NN BlackMask Blog:

What The Fuck is Going On Here

How can 443,000 net hires by businesses actually understate the demand for labor? Because businesses have two options if they need more labor: They can hire more workers, or they can work their existing staff harder.In January, businesses did both — in spades.

It’s a lot easier to add a shift than it is to add a worker, so businesses boosted the average workweek by about 18 minutes, from 34 hours and 24 minutes to 34 hours and 42 minutes. That might not seem like such a big change, but if you multiply it by 132 million private-sector workers, it adds up to a lot of extra hours on the job. How many hours? About 160 million over the course of the month. The increase in hours worked will help reduce labor supply shortages in exactly the sectors where inflation is most threatening: restaurants, hotel rooms, rents, healthcare and energy. The government says that the total number of hours worked in the private sector rose by 1.2% in January after declining slightly in November and December. If businesses had had to hire new employees to work those extra hours instead of giving their current workers extra shifts, they would have had to create 1.6 million new jobs. Instead, they hired those 443,000 new private-sector workers, and asked the 132 million workers who were already on the payroll to work longer hours. What this means for working families is good news. The amount of wages paid in January rose by 1.5% (a 20% annual rate).  For the Federal Reserve (and thus for investors) this increase in weekly pay is seen as a headache. It means the Fed may choose to ratchet up interest rates instead of cutting them later in the year, as the markets have come to expect. The Fed is trying its best to slow the demand for labor by raising interest rates. The Fed believes that the labor market may be getting so tight that companies will be forced to increase wages to attract and retain the workers they need, and in turn that would mean that companies would raise their selling prices to cover their wage bills, creating a dreaded wage-price spiral. Fed chief Jerome Powell promised that his fight against inflation would be painful. But who will bear that pain? Workers have borne the brunt of the impact of higher prices, and now, just when they seem to be pulling their heads above water, they are being told they’ll also need to bear the pain of the cure — unemployment. NN: The key to inflation is wage push inflation. The way the system works is the ED raises rates high enough to drive the economy into a recession. AND said interest rates incrases kills the job market as business shuts down and fire people. And wages decrease and this ends the wage push inflation. But what is happening is the jobs market has gone hog wild and wages are INCREASING. The amount of wages paid in January rose by 1.5% (a 20% annual rate). This means the FED has got a crises on its hands and must must continue to raise rates until the jobs market collapses.

San Francisco Federal Reserve Bank President Mary Daly said in an interview with Fox Business News on Friday that it is “far too early” to declare victory against inflation despite encouraging data seen recently. Daly explained that the trajectory of Fed’s monetary policy is heading towards additional tightening and is projected to remain in restrictive territory until inflation rate drops down to its 2% objective. “The rate decisions will depend on inflation,” Daly stressed, pointing out that even while she anticipates a steady drop in inflation this year, it is doubtful that it will achieve the target. “The jobs number was a ‘wow’ number, but the trend is not surprising,” the Fed official also commented on the latest data, adding that recent figures have showed a “strong labor market.”

EU members have agreed to support a price cap level of $100 per barrel on Russian diesel sales to third-party countries, people familiar with the matter told Bloomberg on Friday afternoon. The EU’s ban on Russian seaborne crude oil products imports, including diesel and naphtha, is scheduled to go into effect on February 5. The EU’s proposal, submitted last week, called for capping the price of Russian diesel sold to third countries at $100 per barrel for products that trade at a premium and $45 for those that sell at a discount. Similarly to the price cap on Russian crude, buyers outside the EU would continue to have access to Western insurance and financing for cargoes if they comply with the price cap. The proposal also included setting a price cap of $45 per barrel for discounted products such as fuel oil, which sources suggest has also been approved.  The goal of the price caps is to limit Russia’s revenues derived from crude oil and its refined products, while keeping the market supplied with Russian energy. Despite the ban and price cap mechanism that are set to go into effect on Sunday, Russia’s energy minister said he saw no reason to reduce the country’s output on petroleum products, nor was it considering a reschedule for its refinery maintenance to make use of possible reduction in Russian demand. Although the price cap goes into effect on Sunday, there is a grace period for cargoes loaded before the cap was agreed to that runs until April. Russian diesel prices were about $90 earlier this week, below the cap. Wood MacKenzie said earlier this week that a $100 cap would not have a significant effect on Russian refiners, but could bring its diesel exports down about 200,000 bpd. NN: Let me see if i understand this. Europe is oil and for that matter energy starved. So the way they solve the problem is prohibit all oil exploration, shut in the production they do have AND embargo their main source of oil for the past 30 years….. Ok and to make it more absurd they believe price caps will bring them more oil at lower prices…….

The U.S. Federal Reserve is likely to need at least two more interest-rate hikes, lifting the benchmark rate to above 5%, to slow an unexpectedly strong labor market seen as contributing to high inflation. That was the betting in financial markets on Friday after the U.S. Labor Department reported employers added more than half a million jobs last month, far more than expected, and the unemployment rate fell to 3.4%, the lowest in more than 50 years. The Fed earlier this week increased its benchmark rate by a quarter-of-a-percentage-point to 4.5%-4.75%. Fed Chair Jerome Powell said that with the labor market still tight he expects to need “ongoing” increases to get monetary policy “sufficiently restrictive” to engineer a more balanced job market and bring down too-high inflation. Interest-rate futures prices, initially skeptical of that view, now reflect that expectation, with a better than even chance seen that the Fed will continue get its policy rate to the 5%-5.25% range by June, if not by May. Financial markets had earlier heard Powell’s repeated references to the start of a disinflationary trend as signaling that just one more rate hike, in March, could suffice. “This is the kind of report that you want to see when coming out of a recession to signal strength in the economy, not when the futures market is looking at the Fed finishing its rate hike cycle,” said Quincy Krosby, chief global strategist at LPL Financial. Traders still expect the Fed to cut rates later in the year, despite Powell saying he does not expect inflation to fall fast enough to allow such a thing. The Fed targets 2% inflation, now running at 5% by the Fed’s preferred measure, the personal consumption expenditures price index. Friday’s Labor Department report did show slower growth in average hourly earnings to a 4.4% pace, from an upwardly revised 4.8% in December. “While the Fed welcomes any signs of easing wage pressures, the pace of growth in average hourly earnings is still too strong to help lower inflation,” Oxford Economics’ Ryan Sweet wrote. NN: Today reports namely the monthly jobs report an the ISM manufacturing index prove the FED is far from done. Its going to take a 6% Fed Funds rate at least to put out this inflationary fire

• ISM index rebounds with six-point gain in January to 55.2
• Orders measure matches highest since beginning of 2022

A gauge of US services snapped back in January after an end-of-2022 slump, suggesting a resurgence in consumer demand that leans against concerns of an imminent economic slowdown. The Institute for Supply Management’s non-manufacturing index rose 6 points to 55.2 in the largest monthly advance since mid-2020, data showed Friday. Readings above 50 signal growth and the January figure topped all estimates in a Bloomberg survey of economists.

The group’s gauge of new orders surged more than 15 points and a measure of business activity strengthened. Both indexes stand at 60.4, with the orders gauge matching the highest level since the start of 2022. Business activity, which parallels the ISM factory production gauge, jumped to the second-highest reading in a year. The figures show the pullback in consumer activity at the end of last year was likely more of a hiccup than the start of a sustained retrenchment in household demand. When paired with a shockingly strong January jobs report, the data indicate the labor market, cooler inflation and rising wages continue to support consumption, at least for now. “Although responses varied by industry and company, the majority of panelists indicated that business is trending in a positive direction,” Anthony Nieves, chair of the ISM Services Business Survey Committee, said in a statement. “Some companies still find it difficult to fill open positions, while others are facilitating staff reductions.”  Ten industries reported growth last month, including agriculture, utilities, and management of companies and support services. Eight industries reported a decrease, led by transportation and warehousing. The report also showed a rebound in demand abroad, likely a reflection of China reopening its economy after three years of strict Covid-19 restrictions on activity. NN: The notion that the economy is slowing and inflation is moderating is nothing more then WallStreet  (who is scared to death about the coming crash)  desperate spin.