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Economic weakness expected to weigh on oil prices in 2023 by Reuters

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© Reuters. FILE PHOTO: The sun is behind a crane pumping crude oil in the Permian Basin in Loving County, Texas, US, November 22, 2019. (Reuters) / Angus Mordant // File Photo

By Brijesh Patel

(Reuters) – Oil prices are set to make slight gains in 2023, a Reuters poll showed on Friday, as a darkening global economic backdrop and the outbreak of COVID-19 in China threaten demand growth and offset the impact of supply shortages caused by sanctions on Russia. .

A survey of 30 economists and analysts forecast the price per barrel to average $89.37 in 2023, about 4.6% below the consensus of $93.65 in the November poll. The global benchmark will average $99 per barrel in 2022.

The price is expected to average $84.84 per barrel in 2023, compared to $87.80 in the previous month.

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“We expect the world to slide into recession in early 2023 as the effects of high inflation and higher interest rates are felt,” said Bradley Saunders, associate economist at Capital Economics.

Brent crude has fallen more than 15 percent since early November and was trading around $84 a barrel on Friday, as rising COVID-19 cases in China dampened expectations of oil demand growth in the world’s largest importer of crude oil. [O/R]

“The oil market remains tight despite a weak global demand outlook as recession fears mount,” said Edward Moya, senior analyst at OANDA, adding that China will be the primary focus in the first quarter of next year.

Most analysts said that oil demand will grow significantly in the second half of 2023, driven by the easing of COVID-19 restrictions in China and central banks adopting a less aggressive approach to interest rates.

The poll showed that the impact of Western sanctions on Russian oil is expected to be minimal.

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“We don’t expect an impact from the price cap, which is designed to give bargaining power to buyers from other countries,” analysts at Goldman Sachs (NYSE:NYSE) said in a note.

This week, Moscow signed a decree banning the supply of oil and its products to the countries participating in the Group of Seven (G7) from February 1 for a period of five months.

“In the event of a sharp decline in Russian exports (which we do not expect to happen), OPEC + will most likely be willing to increase production to prevent prices from skyrocketing,” said data and analytics firm Kepler.

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Standard Chartered becomes first foreign bank to trade bond futures in China (Reuters).

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© Reuters. FILE PHOTO: The Standard Chartered logo is displayed at its main branch in Hong Kong, China August 1, 2017. REUTERS/Bobby Yip/File Photo

SHANGHAI (Reuters) – Standard Chartered’s China unit said it has become the first foreign bank to trade in Treasury bond futures in the country that works to liberalize capital markets.

The move comes as China ramps up efforts to attract global investors amid months of inflows of foreign money from the $20 trillion bond market.

In a statement on Wednesday, Standard Chartered Bank (China) Limited said it had completed its first Treasury futures transaction in China, with the permission of regulators.

The bank said that treasury bond futures are a key tool for managing interest rate risk, and that China’s opening up of the market will allow foreign investors to better participate in the domestic bond market and promote the internationalization of the yuan.

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“We believe that the depth and breadth of global investor participation in China’s capital market will continue to increase” as more comprehensive risk management tools become available, said Asia Chief Executive Officer Benjamin Hong.

Foreign institutional investors have dumped a net 740 billion yuan ($107.48 billion) worth of Chinese bonds in 10 straight months of outflows, amid geopolitical tensions, concerns about China’s economy and US interest rate premiums on China.

Foreign holdings of yuan-denominated bonds traded on China’s interbank market reached 3.33 trillion yuan at the end of November, less than 3% of the total market volume.

The trading of Standard Chartered bond futures comes nearly three years after China in early 2020 freed up banks and insurance companies to participate in the market for the first time, selecting its five largest banks for an initial pilot scheme.

“China’s relentless efforts to expand its opening up, especially the continued opening up of financial markets at a high level, provides huge opportunities for Standard Chartered,” said Jerry Zhang, Vice President of the China Unit.

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In February 2022, Standard Chartered said it would invest $300 million in China-related companies over the next three years and double the related dividend contribution by the end of 2024.

($1 = 6.8847 renminbi)

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Pharmacists in the United Kingdom and the United States are reporting shortages of cold and flu medicines

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Pharmacists in the UK and US are warning of shortages of cold and flu medicines, with an increase in respiratory infections in early winter leaving manufacturers struggling to keep up with demand.

Some pharmacies are finding it difficult to order over-the-counter medicines such as cough syrups and pain relievers, restricting what customers can buy, while some wholesalers are rationing available medicines.

Leila Hanbeck, chief executive of the UK’s Independent Multiplex Pharmacy Association, said shortages – along with other frustrations such as not being able to use their family doctor – mean frontline pharmacists are dealing with a rise in abuse and violence from patients.

She called on the UK government to bring stakeholders together and tackle problems in the supply chain. “We’re running out of essential medicines for colds and flu. Once the demand for something goes up, we fall flat on our faces. Supply can’t meet demand,” she said.

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Those infected are buying medicines to treat symptoms of Covid-19, the flu and other conditions, including Strep-A and RSV, which have seen a resurgence after winters of lockdown. Supply problems come on top of global shortages Antibiotics This led the UK to issue a protocol for a serious shortage of infant formula last month.

Adrian van den Hoeven, general manager of Medicines Europe, which represents generic drug companies, said they expected an increase in demand compared to two years ago, but did not expect it to come before the normal cold and flu season.

He said governments must share more data on infection rates – beyond what’s already been collected on Covid-19 and influenza – so manufacturers can adjust supply chains, which takes several months.

We are not epidemiologists. We don’t know exactly what it will look like: will 2022-2023 be a year away, or will the next five years look like this? ” He said.

In the UK, pharmaceutical industry associations have reported shortages of treatments including Lemsip, Haleon Beechams and Day and Night Nurse.

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Superdrug, one of the UK’s largest pharmacy chains, confirmed that the shortage was a “national problem”, saying there had been a “huge peak in demand for branded and proprietary cold and flu products”. The company said demand for Superdrug-branded remedies was above its highest levels in the acute phase of the pandemic.

Pharmacists reported price increases of antibiotics amid shortages last month. But Paras Shah, chief executive of UK wholesale retailer Sigma, said prices for over-the-counter treatments do not react to market conditions as quickly as prices for prescription medicines.

In the United States, CVS Pharmacies have limited purchases of children’s pain relief products to two per customer since last month. Walgreens has limited the number of online customers to six per transaction to “prevent excessive purchasing behaviour”.

Johnson & Johnson, which makes the pain relievers Tylenol and Motrin, said its production sites are working around the clock to handle “high consumer demand due to a very difficult cold and flu season.”

Consumer health groups said the shortages were caused by a jump in demand, rather than problems securing essential ingredients. Rickitt reported a “significant increase in demand” but said she was doing everything she could to minimize disruption. Haleon said it is increasing its supply capacity but that customers in some areas may face shortages.

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Fed’s hawkish rhetoric fails to lift the dollar; Aussie jumps via Reuters

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© Reuters. FILE PHOTO: One hundred US dollar banknotes are seen in this illustration taken in Seoul on February 7, 2011. REUTERS/Lee Jae-won

Written by Ray Wei

SINGAPORE (Reuters) – The dollar struggled higher on Thursday even though federal policymakers reiterated their commitment last month to fighting inflation, while the dollar rebounded after China eased restrictions on Australian coal imports.

Minutes of the Fed’s December monetary policy meeting released last night showed that while officials agreed the central bank should slow the pace of aggressive rate hikes, they remained focused on curbing inflation, and were concerned about any “misperception” in financial markets. that their commitment was declining.

Minneapolis Federal Reserve Chairman Neel Kashkari also said on Wednesday that he sees the Fed’s target interest rate peaking at 5.4%, higher than current market expectations of just under 5%.

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However, that failed to give a boost to the greenback, which was down 1.4% against the Canadian dollar overnight.

The pound sterling last settled at $1.2062, after rising 0.76% against the dollar in the previous session, while the euro rose 0.19% to $1.0624, after gains of more than 0.5% overnight.

said Ray Attrell, head of foreign exchange strategy at National Australia Bank (OTC: (NAB) ).

Economic data released on Wednesday also revealed that US employment declined less-than-expected in November, although a survey from the Institute for Supply Management (ISM) showed US manufacturing activity contracted again in December.

“With the payroll coming up on Friday, the message is still that the job market is still in very good shape,” Atrell said.

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Against a basket of currencies, it fell 0.14% to 104.06, after falling 0.5% on Wednesday.

The Australian dollar rose 1.7% overnight after news that China’s state plan allowed three central government-backed utilities and its largest steelmaker to resume coal imports from Australia, in the first such move since Beijing imposed an informal ban on coal trade with Canberra in 2020. .

The Australian dollar finally settled at $0.6835, while it rose 0.11% to $0.6298, after rising 0.7% in the previous session.

“The Australian dollar has clearly benefited from the coal story,” said NAB’s Atrell, adding that most other commodity currencies were supported.

The Japanese yen rose 0.5% to 131.97 per dollar on Thursday, reversing a 1.2% decline overnight, as traders bet the Bank of Japan may give up its controversial yield curve grip.

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