Citigroup Inc.’s Ed Morse, the global head of commodities research, said the oil market would need a lot more uncertainty over supplies before prices could reach $100 a barrel.
“There is a scenario for $100 a barrel oil. But I don’t think we’re anywhere near that yet,” Morse said in an interview on Bloomberg Television.
“This was a surprise,” said St. Louis Fed President James Bullard when asked about the impact of OPEC+'s sudden and unexpected decision to cut crude production dramatically (prompting a spike in oil prices).
A nasty surprise too, as we detailed previously, because while the US central bank is already trapped, and is desperately looking for any excuse to halt its tightening campaign now that inflation is accelerating to the downside not just because regional banks desperately need a lower Fed Funds rate to short-circuit the relentless deposit drain which won't stop (and will lead to even more bank failures and resolutions) until their deposit rates can at least match those of the Fed, but also because various liberal rags have already thrown Powell, pardon, the "Trump-era holdover" under the bus for the coming recession...
OPEC's shocking shot across the Fed and Biden bow revealed in its intention to keep oil prices high even as central banks push the world into a recession, just made life for the central planners very difficult, as the sordid stench of stagflation is suddenly all over the place.
But while much will be said about the monetary consequences of OPEC's action, Bullard is aware of the potential for the trap above:
“Oil prices fluctuate around. It’s hard to track exactly. Some of that might feed into inflation and make our job a little bit more difficult,” he said.
Bullard did hedge a little, noting that “whether it will have a lasting impact I think is an open question.”
As a reminder, Bullard said last month that his own forecast was for rates to peak at 5.625% this year. Officials next meet May 2-3.
While acknowledging the potential importance of the shift, Bullard noted that an increase in oil prices this year was consistent with his economic outlook for more demand for energy.
“I would’ve expected somewhat higher oil prices anyway with China coming back sooner than expected during the first half of 2023 and with Europe skirting recession,” he said.
“And strong data in the US, all of those are are pretty bullish factors for the oil market.”
While we know that Bullard is a non-voting member of the committee this year, it is clear he represents the more hawkish members' thinking.
The outspoken hawk played down fears of the banking crisis escalating (and thus the odds of a more dovish Fed):
“The problem with Wall Street is they’ve got too much probability on that branch,” Bullard said about the turmoil translating into a worsening economy.
Markets should "listen to me" Bullard chides..
But with oil prices spiking alongside China's PMI miss overnight combined with US Manufacturing's weakness this morning, stagflationary fears are really started to build... Central bankers' greatest nemesis.
https://www.zerohedge.com/markets/bullard-admits-opec-cuts-may-make-feds-job-little-more-difficult
The U.S. Federal Trade Commission (FTC) on Monday ordered Illumina to divest cancer diagnostic test maker Grail, finding that its ownership would stifle competition in the U.S. market for cancer tests.
Illumina said it would appeal the decision, and will seek expedited consideration from an appeals court. The company said the FTC order to unwind the deal would be automatically put on hold.
Judge Michael Chappell, an administrative law judge at the agency, ruled last year that the $7.1 billion acquisition of Grail would not hurt competition. The FTC staff appealed the decision to agency leadership.
The FTC, which enforces antitrust law, first filed a complaint in March 2021 to stop Illumina's bid for its former subsidiary.
The agency has expressed concern that Illumina, the dominant provider of DNA sequencing of tumors and cancer cells that help match patients with the best treatment option, might raise prices or refuse to keep selling to rivals of Grail, which is seeking to market a powerful test to diagnose many kinds of cancer from a single blood test, known as liquid biopsy.
At a December hearing, Illumina pledged to keep selling its DNA sequencing services to other firms. It has offered to sign contracts to supply any of Grail's rivals and to not raise prices.
Meanwhile, Illumina completed the takeover of Grail in August 2021, despite the lack of regulatory approval from Europe or the United States.
Illumina shares were off 1.4% at $229.35 on Monday.
Billionaire investor Carl Icahn, who owns 1.4% of Illumina, is waging a boardroom challenge. He has called for Illumina, now valued at $36 billion, to unwind its deal for Grail, which he called a risky acquisition that cost shareholders $50 billion.
The deal also faces stiff headwinds in Europe.
In Brussels in early December, EU antitrust regulators proposed measures for Illumina to unwind its acquisition of Grail, three months after blocking the deal on concerns it would hurt competition. The EU antitrust watchdog is set to issue a final decision in early 2023.
Texas Governor Greg Abbott sees an opportunity for Lone Star State shale drillers to massively boost crude production in light of OPEC’s surprise decision to crimp output.
The leader of the biggest US oil-producing state pegged the potential increase in Texas crude production at 1 million barrels a day in a Twitter post late Sunday. That would push the state’s output above 6 million barrels a day — a level not seen in at least 43 years of Energy Department data.
Takeda to obtain exclusive worldwide rights to develop, manufacture and commercialize Antibody Drug Conjugates (ADC) using a panel of selected antibodies developed by Innate
