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Tuesday, February 7, 2023

On the Price of Russian Oil | Igor Sechin

The EU will no longer set prices for Russia’s flagship Urals oil blend, now that Asia is the largest consumer of western-sanctioned Russian crude, the head of the country’s oil major Rosneft, Igor Sechin, said on Monday.

An EU embargo on seaborne exports of crude accompanied by price caps on oil and petroleum products originating from Russia has triggered a reshuffle in global oil supply. In a matter of months, Moscow rerouted most of its oil flows that used to go to Europe, to Asian markets. The country has ramped up its seaborne oil shipments to China, India and Türkiye at the expense of Western nations.

Oil exports to India alone jumped 33 times in December, with Russia now the country’s largest supplier, replacing Iraq. About 70% of Urals cargoes loaded last month went to New Delhi, according to Reuters calculations.

“If Russian oil does not enter the European market, then there is no reference price. Reference prices will be formed where oil volumes actually go,” Sechin pointed out, speaking at the India Energy Week forum.

The Russian government is now discussing how to calculate Russia's taxable oil price following the import ban and price caps set by the EU and G7 countries. Currently, for tax purposes, the average price for Urals on the world market is used, in particular in the ports of Augusta (Italy) and Rotterdam (Netherlands). But due to sanctions, Russian oil is practically not supplied there. Sechin also suggested that “futures contracts, futures settlements” should be abandoned at the first stage in order to regulate market indicators. To stress his point, the head of Russia’s oil giant even quoted from the Bible. “As it is written in Ecclesiastes, "What is crooked cannot be made straight. And what is lacking cannot be counted.”

Meanwhile, Asian buyers have ramped up imports of a wide variety of Russian crude oil, including lesser-known Arctic grades. Two other popular blends, ESPO and Sokol, have been trading above the Western price ceiling of $60 a barrel, at $66 and $71 per barrel respectively, as of Tuesday.

Quoted from:

RT.com (Feb 07, 2023) - EU no longer dictates price for Russian oil – Rosneft CEO.

Thursday, November 17, 2022

S&P 500 Performance by Weekday

Bespoke (Mar 28, 2022) - On a trailing 12-month basis, the S&P 500 has performed poorly on Mondays and Tuesdays before gaining steam from Wednesday through Friday. This diverges from the patterns seen over the last thirty years, in which Thursday and Friday struggled relative to the performance over the first three trading days of the week. This year, oil has averaged gains on every day of the week, but the strongest performance has occurred early in the week, which is interesting as Monday and Tuesday have tended to be the worst days of the week for oil over the last 30 years. Bonds have performed poorly in the beginning of the week over the last twelve months but have partially recovered in the last two trading days. Over the long run, the safe asset has traded narrowly with only Wednesdays averaging a loss. Tuesdays and Thursdays have been strong days for the US Dollar over the last twelve months, but these days tend to result in flat to negative performance when looked at over the last 30 years.

Below we summarize the cumulative performance by weekday for the S&P 500 over the last 30 years. As you can see, Tuesday has been the best performing day by far, booking performance gains of 160.5%. Wednesday has posted a cumulative gain of 83.6%, which lands the day in second place. Friday and Thursday have been the weakest days, booking a cumulative gain of just 27.4% and 28.2%, respectively. Monday lands in the middle, recording a cumulative gain of 41.3%. As outlined above, the recent shift in weekday performance deviates from the norms of the last 30 years as investors have come out of the weekend with fears but concluded the week with optimism.