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North Korea reportedly fired unidentified projectile towards the East Sea

This is the second time this week, following a similar incident a few days ago here. Tensions are stirring and the frequency of these missile “tests” serves as an indication for how things are developing at the moment. Markets have generally learned to shrug this off but just be wary in case there are any actual risks that may arise.

US National Security Advisor: Iran nuclear talks ‘not going well’

Sullivan says talks not going well in the sense that the US does not have a path back into the JCPOA.

“We do not yet have a path back into the JCPOA,” says NSA Jake Sullivan. He says that efforts to salvage the deal have “proven more difficult” this year than the US would have liked to see.

Oil has struggled today as it continues to consolidate in the middle of the recent breakdown. The failure to even achieve a 50% bounce is negative.

oil technical analysis

US official says discussions are likely on destroying Iranian nuclear facilities

A US official tells Reuters that there will be discussion on possible military exercises that would prepare for a worst-case scenario to destroy Iran’s nuclear facilities should diplomacy fail. In order to prevent Iran from developing nuclear weapons.

Speculations such as this should provide a tailwind for oil, at the margin.

  • The U.S.-Israeli preparations, which have not been previously reported, underscore Western concern about difficult nuclear talks with Iran

Iran nuclear talks expected to re-start later this week but signs so far are negative

Ebrahim Raisi

Iran nuclear talks broke off Friday and various reports from the weekend say progress has been minimal after seven rounds.

WTI crude oil opened the new week up more than $1 to $67.56, though that may be more a signal on overall risk appetite and sentiment around omicron than Iran talks.

European negotiators called for a brief return to capitals to contemplate two proposals from Iran. It’s not clear when talks will return but all sides are expected to speak again later in the week in Vienna.

Reports from Iran say officials there want the US to drop all sanctions, while the US wants to keep in place human rights and terrorism designations.

A joint statement from the UK, France and Germany said Iran has backed away from proposals in drafts that were agreed under the previous government.

“Over five months ago, Iran interrupted negotiations, and since then, Iran has fast-forwarded its nuclear program,” the three said. “This week, it has backtracked on diplomatic progress made. Iran is breaking with almost all of the difficult compromises crafted in months of tough negotiations and is demanding substantial changes to the text” that undermine the draft, which was between 70 and 80 percent finished, they said.

The US said it wouldn’t let Iran drag out negotiations while its nuclear program advances.

The oil market is keenly watching the talks develop but various headlines haven’t been immediate market movers. That suggests skepticism that any deal is imminent and that any deal would result in an extended period before Iran had the capability to meaningfully increase exports. At the same time, many contend that official data undercounts Iranian barrels already in the market so there’s plenty of confusion to go around.

WTI was last up $1.10 to $67.37 while brent opened the week up $1.13 to $71.07.

RUMOUR doing the rounds – Emergency Kremlin meeting called. Putin announcement set for 0200 local time.

That is the chatter getting some play about the place.

I have NO IDEA as to its veracity but it would be remiss of me not to pass it along. Of course, if I can find any confirmation I’ll pass that along. For now, trade this (or not) with due care – its only a RUMOUR, K?
Its just after 1am in Moscow. I have no idea why Putin would be making an announcement at 2am. He’d be more likely to make an announcement after some action had been taken (I’m assuming this rumour is related to Ukraine affairs).
ukraine russia

There is no breakthrough to report on Biden-Xi meeting – senior US official

Reuters with the headlines, citing a senior US administration official

  • Nothing new established on Taiwan in terms of guardrails
  • Biden stressed importance of China fulfilling trade agreement commitments
  • Biden, Xi had extended discussion on Taiwan
  • Biden was direct about concerns about Beijing’s behaviour on Taiwan Strait
  • We were not expecting a breakthrough, there are none to report
  • Beijing Winter Olympics did not come up in talks
  • Human rights came up multiple times in the meeting
  • Biden, Xi did not just stick to the script; meeting was respectful, open
Different day, same story. A whole lot of talk with nothing really being said and no real takeaways essentially. Well, were we really expecting anything else? *snooze*

China statement says Xi and Biden spoke about strategic, fundamental issues

Chinese statement following the virtual summit between China President Xi and US President Biden.

‘Fundamental’ issues is likely referring to fundamental differences the two have over the status of Taiwan (at a guess). China sees the island of Taiwan as a part of China, not an independent state. The US sees Taiwan as an independent democracy.
Anyway, that’s it for now, I’m sure there will be further to come from both sides on how the meeting went.
taiwan china map
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