Skip to Content Skip to Menu Skip to Footer

S&P Global — 6 Dec, 2022 — Global

Daily Update: December 6, 2022

author's image

By S&P Global

Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy.

Oil Market in Flux

Elevated prices, tight supply, volatile demand and pervasive uncertainty characterized oil markets through most of 2022. The fourth quarter will likely uphold those descriptors. Oil markets at year-end may be more unsettled than ever as a dizzying array of events shape their contours moving into 2023.

At its Dec. 4 meeting, the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, agreed to maintain through 2023 its production cut of 2 million barrels per day, announced in October, defying market watchers' expectations of additional cuts. The OPEC+ meeting followed the G-7 and Australia in agreeing Dec. 2 to a $60-per-barrel price cap on Russian oil, which, along with the EU ban on seaborne Russian crude, took effect yesterday. The price cap's effectiveness at $60/b is questionable given that oil prices are at year-to-date lows, and Russian Urals and eastbound Eastern Siberia Pacific Ocean crude were assessed at $54.94/b and $74.32/b, respectively, in late November, according to S&P Global Commodity Insights. At this level, market expectations are moving toward limited oil flow disruptions. The G-7 and Australia noted, however, that they could revise the cap. OPEC+ will meet again June 4, 2023, though the group could call an emergency meeting earlier than that if recommended at its ministerial-level market review meeting on Feb. 1, 2023.

Meanwhile, protests and rising COVID-19 cases have swept across China, leading some analysts to revise down oil demand estimates for the world's largest oil importer. Such perturbations, among other demand-side factors in Asia, are critical to the global market, especially since Russia has diverted significant oil exports toward Asian markets. 

Asia's crude oil market typically trades two months ahead of the loading cycle, which would see Asia trading December-loading barrels in October. There was little to no trade information for December-loading Far East Russian barrels, reflecting caution as sanctions and the price cap loomed. Later this month, data on February-loading barrels may indicate how major Asian importers interpret the sanction and price cap. But we may not need to wait to discern China's stance on the sanctions and price cap, as participants at the Nov. 29 Russia-China Energy Business Forum intimated a more cooperative energy security relationship between the two nations.

On the supply side, tankers unwilling to service Russian oil may hamper Russia's ability to continue rerouting crude exports. Shipowners based in the EU or one of the G-7 nations enjoy a large market share of Russian tanker trade, and given that Russia vowed not to sell oil to countries complying with the price cap, the country will likely struggle to find sufficient shipping capacity. The EU ban may increase the use of Russian, Chinese and shadow fleet vessels, the kind used to move Iranian and Venezuelan crude, which may create competition between Venezuela, Iran and Russia for vessels willing to move sanctioned crude. Still, some European-owned vessels could continue shipping Russian crude despite insurance issues, leveraging new schemes and recently established companies.

Under a barrage of challenges laced with uncertainty, the global oil market is akin to Heraclitus' imagined river of flux: With ever-changing dynamics, one cannot observe the same oil market twice. The market may exhibit similar characteristics from time to time, but what emerges in the wake of the G-7 price cap and EU ban will undoubtedly differ from before.

Today is Tuesday, December 6, 2022, and here is today’s essential intelligence.

Written by Wyatt Scott.


U.S. Corporate Bankruptcy Filings Fell In November

U.S. corporate bankruptcies fell in November from the previous month, according to S&P Global Market Intelligence data. There were 29 bankruptcy filings in November, down from 36 in October. As of Nov. 30, 340 companies had filed for bankruptcy in 2022, fewer than any other comparable period going back to at least 2010.

—Read the article from S&P Global Market Intelligence

Access more insights on the global economy >

Capital Markets

This Week In Credit: Stability Amid Continuing Uncertainty (Dec. 5, 2022)

A less volatile end to a turbulent 2022 for financial markets is within reach. But a mixed U.S jobs report last Friday — and high wage pressures in particular — may complicate the timing and extent of the Federal Reserve pivot markets increasingly anticipate. Credit pricing and ratings performance generally stabilized last week, while primary market activity can be expected to slow into year-end and in advance of key central banks' final monetary policy meetings next week.

—Read the report from S&P Global Ratings

Access more insights on capital markets >

Global Trade

Commodities 2023: Easing War Impact, Rising Supply Set To Make Asian Thermal Coal More Affordable

With the impact of the Russia-Ukraine war on commodity markets softening as the new year knocks and several countries aiming to raise production, Asian thermal coal prices are expected to see a reasonable correction in 2023 given that supply concerns will likely take a back seat. Indonesia, China and India have all announced higher production targets for the next year as part of their larger goal of meeting domestic needs internally, which is expected to lessen the load on the Asian thermal coal trading market, according to miners, traders and buyers surveyed by S&P Global Commodity Insights.

—Read the article from S&P Global Commodity Insights

Access more insights on global trade >


Listen: COP15 Preview: What Will Make UN’s Big Biodiversity Conference A Success

The second part of the U.N.'s Convention on Biological Diversity, known as COP15, kicks off in Montreal on Dec. 7. In this episode of the ESG Insider podcast, hosts Lindsey Hall and Esther Whieldon tell you what to expect. They speak to Elizabeth Mrema, COP15 executive secretary and co-chair of the Taskforce on Nature-related Financial Disclosures, or TNFD. She talks to them about themes that will be covered during COP15 and what will make the conference a success.

—Listen and subscribe to ESG Insider, a podcast from S&P Global Sustainable1

Access more insights on sustainability >

Energy & Commodities

Price, Supply Factors Boost Viability Of Corn-Feed Wheat Substitution In Asia

In view of the tight global corn export supply entering 2023, feed buyers in Asia may soon find a practical solution through the substitution of corn with feed wheat, considering a narrowing feed wheat against corn spread as more exports of Australia's massive bumper wheat crop enter the global market. Platts CFR Northeast Asia corn prices have persisted above $300/mt levels this year. Since September, only 13% of recorded trades into South Korea closed below $330/mt CFR levels, S&P Global Commodity Insights data showed.

—Read the article from S&P Global Commodity Insights

Access more insights on energy and commodities >

Technology & Media

Micro-Bet Proponent Simplebet Eyes More Action With Parlays, Sportsbooks

Simplebet Inc. is a technology company whose platform is enabling fans to place multiple in-game wagers, or micro bets, driving more fan engagement around both professional and college sports. The company has partnerships with DraftKings Inc., Bet365 Group Ltd., Betway and Intralot. It is also in discussions with other sports betting operators. S&P Global Market Intelligence recently caught up with Simplebet co-founder and CEO Chris Bevilacqua, who previously co-founded sports media advisory and investment firm Bevilacqua Helvant Ventures and CSTV Networks, now known as CBS Sports Network. Joining the conversation was Simplebet Vice President of Corporate Development JR Hernandez.

—Read the interview from S&P Global Market Intelligence

Access more insights on technology and media >

Content Type