New Nation Report :
As a result of the significant increase in Covid-19 cases, The Chinese economy is slowing rapidly, and 2022 may be the year when it reaches zero growth. Simultaneously with Russia’s invasion of Ukraine, the US administration is taking steps to boost oil production both at home and abroad.
The number of cases reported in China’s new daily Covid-19 has more than doubled, owing to a deteriorating outbreak in northeastern Jilin, where authorities have banned travel to and from the region and restricted the movements of millions of locals.
China has been the target of a new wave of Western voices challenging China’s dynamic zero-Covid strategy and underestimating China’s economy as it tries to contain a voracious Covid-19 breakout in two years.
According to Bloomberg, Morgan Stanley has lowered its economic growth projection for China to zero for the first quarter of this year, predicting that the country will miss its annual GDP target of 5.5 per cent this year due to its zero-Covid policy.
The mainland Chinese blue-chip CSI 300 index dropped 4.6 per cent to its lowest close since June 2020. The Hang Seng index in Hong Kong fell 5.7 per cent, closing at a six-year low, as heavyweight technology and banking sectors plummeted.
Outbreaks in Shanghai and Shenzhen, with 139 and 60 mostly asymptomatic new cases on Monday, have forced local authorities to limit citizen movement, albeit with more targeted and varied restrictions. Shenzhen set a daily record of 80 new illnesses on Sunday.
In the US, the Biden administration appears to be shifting its attitude in response to Republican lawmakers’ demands. Executives at some of the world’s largest oil and gas companies said this week in Texas that they are increasing crude production as US gasoline prices rise to $4 a gallon amid expectations that President Joe Biden and Congress will ban Russian petroleum imports — but the companies warned that new supplies will not arrive overnight.
Exxon Mobil and Chevron are both increasing oil output in the massive Permian Basin region in West Texas and New Mexico, initiatives that both companies announced last year but have gained new urgency as oil prices have risen to their highest levels in 14 years.
On word that the US was considering banning Russian oil imports, US crude oil prices rose more than $10 overnight to $130 a barrel, however prices fell later in Monday trading. According to fuel price service GasBuddy, retail gasoline prices have risen more than 46 cents in the last week, to a national average of $4.06 per gallon.
A quick increase in shale output in the United States, on the other hand, could be the most damaging factor for oil prices. According to fresh EIA data, shale oil output in the seven most prolific shale basins in the United States is on track to reach its highest level since March 2020.
According to the newest version of the Energy Information Administration’s Drilling Productivity Report, overall output in the seven major US shale basins would increase by 117,000 barrels per day next month, to 8.708 million barrels per day. The report comes as the United States’ crude oil production is under scrutiny as to why it isn’t increasing.
Projecting US shale oil production, regardless of the EIA’s prediction for more crude oil next month, isn’t an exact science.
The EIA now expects US crude in the Permian to rise from 5.138 million bpd to 5.208 million bpd in April, an increase of 70,000 bpd. With a 23,000 bpd increase to 1.146 million bpd, the Eagle Ford is likely to witness the second-largest increase. The Bakken is predicted to grow by 16,000 barrels per day.
Additionally, the Biden administration is allegedly in contact with Saudi Arabia, the world’s largest exporter, as well as Venezuela, whose government has also been sanctioned, to help cover any oil shortages caused by Russia’s shipments being cut off. Executives, on the other hand, claim that high worldwide prices have already provided producers with all the motivation they require to increase output, and that no one is holding back.
With Western sanctions in place on global financial markets and trade, there has already been a sharp decline in demand for Russian oil. The rapid slowdown in China and the decline in oil prices together have put Putin in a far more difficult financial and political position in achieving a swift victory in Ukraine.
