Oil May Collapse to $65 by Year-End

• 3 min read
Oil May Collapse to $65 by Year-End

MARKET MOVERS

  • Tesla is no longer the world’s largest EV seller. Shenzen-based BYD (ticker: 1211. Hong Kong) sold 641,000 new energy vehicles in the first half of 2022, the company said on July 3. That represents an increase of almost 315% year-on-year in the same period last year. In June, BYD sold 134,036 new energy vehicles, a year-on-year increase of 162.7%.

  • Short sellers pull back on their bets against the stock market. Total U.S. short-selling increased by $20 billion in June, according to technology and data-analytics company S3 Partners. That was down from a $61 billion increase in May and less than most months in 2022. Investors shorting the market might be placing an outright bet that stocks will fall, or reducing their exposure to a market downturn. Read more here.

  • Natural gas soars 700%, becoming the driving force in the new Cold War. Shortages of fuel are rippling throughout the global economy, threatening recessions and a further wave of inflation. The war in Ukraine catalyzed the gas crisis by taking out a crucial chunk of supply. Now the scramble to fill that gap is turning into a worldwide stampede, as countries race to secure scarce cargoes of liquefied natural gas.

  • Single-family homes sell the fastest. About 82% of home sales are for single-family residences, according to a recent survey from the National Association of Realtors®. The El Paso, TX, metropolitan area has the highest concentration of single-family homes out of the 100 largest metros—representing 95.8% of all available homes. The main drivers are the availability of lower-cost land and the abundance of builders putting up new homes.

  • House prices were up 20.2% YoY in May, as per CoreLogic. As in past months, all states and Washington, D.C. posted annual appreciation, with 13 states posting gains of more than 20%. While rising interest rates cooled overheated demand this spring and are expected to contribute to slowing price growth over the next year, motivated buyers may have less competition and more opportunities moving forward.

WHAT TO WATCH

  • Oil could plummet to $65 by year-end if a recession hits, Citi speculates. The firm said that in a recession scenario with rising unemployment, and household and corporate bankruptcies, commodities would chase a falling cost curve as costs deflate and margins turn negative to drive. Citi added that demand declines would lead to surpluses developing, which require prices to fall until supply is curtailed to restore equilibrium. Read more here.

  • Sam Bankman-Fried will consider acquiring troubled crypto miners next. FTX co-founder and CEO Sam-Bankman Fried are open to acquisitions of troubled crypto miners in order to help stem contagion in the crypto industry.  “When we think about the mining industry, they do play a little bit of role in the possible contagion spread, to the extent that there are miners that were collateralizing borrows with their mining rigs,” Bankman-Fried said.

  • Top Wall Street strategists see the stock market recouping most of its losses into the year-end. The S&P 500 is expected to finish the year around 4,627, more than 20% higher than Friday’s level, according to the average year-end target of the top 15 Wall Street strategists. That means the strategists think the market will likely recoup most of 2022′s losses and finish the year down only about 3%. Read more here.

  • Crypto lender Nexo offers to buy embattled rival Vauld as the market consolidates. Nexo has signed a term sheet with Vauld giving it 60 days of exclusive talks to explore an all-equity acquisition of the company. If successful, Nexo said it plans to restructure the company and pursue an expansion in Southeast Asia and India. With no government to turn to, several crypto firms have sought the help of their peers in hopes of a bailout instead.

  • Euro to reach parity against the U.S. dollar unless the natural-gas crisis ends. The euro is reflecting the fragility of natural gas supplies. Mostly, that’s about Russia cutting off supplies to Europe, due to the war in Ukraine, but there’s also the issue of the recent explosion at the Freeport LNG facility in the U.S. as well as strikes impacting output from Norway. Read more here.
← Elon Musk Withdraws Bid for Twitter
Coal Makes a Comeback As World Thirsts for Energy →

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