What’s Happening: West Texas Intermediate futures, the benchmark for US oil prices, and Brent futures, the global benchmark, are now trading at their lowest levels in six weeks due to to signs that supply restrictions could begin to ease soon.
In the United States, prices fell sharply on Wednesday after oil inventories at a key hub in Cushing, Oklahoma, rose for the first time in weeks.
But Bjornar Tonhaugen, head of oil markets at consultancy Rystad Energy, told me that the biggest factor driving prices right now is the expected release of strategic reserves from the United States and China.
According to the White House, US President Joe Biden and Chinese President Xi Jinping discussed the “importance of taking action to address global energy supplies” during their virtual summit this week. That sparked talks about a coordinated move started by the White House to put millions of barrels of oil on the market.
A spokesperson for China’s National Food and Strategic Reserves Administration told CNN on Friday that it was “moving forward with work related to the release of crude oil at this time,” but declined to comment on whether it was in response to a request. America’s team of working together to address supply shortages.
Based on current price movements, Tonhaugen said, investors expect between 20 million and 30 million barrels to come online next month. That could be from the United States and China together, or through broader action coordinated by the International Energy Agency.
However, he emphasized that the release of strategic reserves will not change the overall picture for long.
“[Releasing] Strategic reserves is not the same as getting more continuous oil production online, “said Tonhaugen.
But more lasting relief could come. The IEA said in a report this week that it expects global oil supplies to increase by 1.5 million barrels a day during November and December as some of the production in the United States recovers again.
“The world oil market remains tight in all respects, but relief from the price spike could be on the horizon,” the Paris-based agency said.
OPEC is also steadily increasing production, but there are doubts whether the supply gains will be enough to meet an increase in demand for fuel.
“This is a distraction from the fundamental change that is taking place and from the misguided government decisions that are aggravating this difficult situation,” the group said in a statement.
Warren Buffett-backed Paytm stumbles on business debut
This just came in: Paytm shares launched in Mumbai on Thursday. The startup’s shares were launched at $ 26 each, below the offer price. They ended up down more than 27%, giving the company a market value of less than $ 14 billion.
The weak debut reflects analysts’ fears about the digital payments company, reports my CNN Business colleague Diksha Madhok. Despite his uproar, he lost hundreds of millions of dollars last year and appears far from ready to turn a profit. It also faces competition from some of the largest tech firms in the world.
Its initial public offering still marks a milestone. The digital payments company raised $ 2.5 billion in its IPO, the largest ever conducted in the country when measured in local currency.
Backed by investors such as Warren Buffett, Masayoshi Son, and Alibaba, Paytm is one of the best-funded startups in India.
The company took off five years ago when Prime Minister Narendra Modi banned two of the country’s largest banknotes. The move was hugely disruptive to the Indian economy, but it helped Paytm grow at an explosive rate – the company signed 10 million new users in one month.
Paytm now has 337 million registered consumers and 22 million merchants. However, the field is filling up with people. Facebook and Google also want a piece of the huge market and have launched their own mobile payment systems in the country.
The metaverse is bigger than just Facebook
Nvidia recently announced the formal launch of NVIDIA Omniverse, a platform for simulating and designing virtual worlds. The company has said it hopes to tap into the 40 million 3D designers in the global market.
“This is just the tip of the iceberg of what is to come,” said CEO Jensen Huang.
Then there is the Roblox gaming platform, which allows users to generate their own avatars and play games created by other players. The shares have soared nearly 160% since they debuted on the New York Stock Exchange earlier this year.
Epic Games CEO Tim Sweeney told CNN in Seoul that the metaverse will not be created by a single company. “It will be created by millions of developers, each of whom will develop their part,” Sweeney said.
One step back: Facebook caused a sensation when it changed its corporate name to Meta Platforms as it shifts its focus to augmented reality and virtual worlds. But if your vision of the future is realized, you will not be the only one to make a profit.
Until next time
Also Today: Initial US Unemployment Claims for last week were posted at 8:30 am ET.