Archives of “March 1, 2021” day

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Oil – heads up for the OPEC+ meeting this week – eyes on supply easings (maybe …)

  
Analysis, Crude

The meeting (via remote videoconference) of OPEC and non-Opec (i.e. OPEC+) is on March 4.

The background to the meeting is
  • a strong rise in pieces to pre-pandemic levels (oil is up again today)
  • The US is recovering some output from the big freeze
  • OPEC+ has constrained supply
  • as vaccine rollout accelerates round the globe the ropect is for further rising demand
OPEC+ will be making a decision on April output, with many expecting the cartel and its allies will bump production higher from April. Saudi Arabia is, however, urging caution on supply increases (at least its doing so publicly), while Russia is signalling it want to puch output higher.
A small bump in output is likely to see prices remain steady to higher. However, continued high prices will encourage US shale operators back into increased investment and hence new supply in the market. OPEC+ is walking a fine line on its objectives.

US media – Democrats abandon backup plan on $15 per hour minimum wage hike

  
  Analysis

The backup plan, plan ‘B’, was to hike pay for minimum wage workers through tax penalties on corporations.

The Washington Post, citing two unnamed sources, report that plan B has been shelved:
after encountering numerous practical and political challenges in drafting their proposal
—
The plan was to add tax penalties on large corporations that fail to pay $15 an hour.

China – Caixin/Markit Manufacturing PMI for February: 50.9 (expected 51.4, prior 51.5)

  
Analysis, Economy
Caixin/Markit is the private survey. At 50.9 its a 9 month low. In summary from the report:
  • slower rises in both output and new work for the third month running
  • New export work declined for the second month running
  • raw material shortages and transport delays led to a marked lengthening of suppliers’ delivery times
  • increase in production … growth eased to a ten-month low
  • employment falling modestly
  • little pressure on operating capacities, as backlogs of work fell for the first time since last May, albeit marginally
  • Greater prices for raw materials and higher transport costs led to a further substantial rise in input costs

Japan – Jibun Bank/Markit Manufacturing PMI (final) for February 51.4

  
Analysis, Economy

Japan Jibun Bank / Markit PMIs for February comes in at 51.4

  • preliminary for Manufacturing was 50.6
  • prior 49.8
From the report, in brief:
  • first improvement in operating conditions since April 2019
  • modest expansions in both output and new order inflows
  • supply chain disruption caused … input cost inflation rose to the fastest for two years
  • businesses remained optimistic that production would rise over the coming 12 months
  • Production volumes increased for the first time since December 2018
  • Firms cited a gradual recovery in demand
  • new orders expanded for the second successive month
  • new export sales increased for the first time in four months
  • employment levels continued to decrease
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