Russian oil has reordered energy markets this year. Here's everything you want to know about wartime crude flows
Welcome back, markets people. I'm Phil Rosen, and today we're breaking down how Russia's war on Ukraine continues to reorder energy markets.
Moscow's wartime gambit —from seeking new buyers to siphoning off supplies to former customers — has exacerbated a global energy shortage, and it's worth taking a moment to retrace what's happened so far.
Sure, gas prices in the US have dropped for more than 30 consecutive days, but don't mistake the trees for the forest — energy markets are still incredibly tight.
Packed schedule today — let's get right to it.
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1. Energy markets have tracked Russian oil moves all year, as the war in Ukraine has impacted crude flows across the world and put downward pressure on supplies.
Moscow has sought out alternative customers since invading Ukraine, and even launched new chartered ships to circumvent blocked routes.
Saudi Arabia, for example, has more than doubled its Russian oil imports in the second quarter, and Cuba emerged as a new buyer of the shunned supplies, too.
But Europe is facing the worst of the global energy crunch — the CEO of Shell said Europe may have to resort to rationing energy this winter. Germany especially is in crisis mode given its reliance on the Nord Stream 1 pipeline, which Moscow shuttered for maintenance last week.
Deutsche Bank forecasted that Germans could turn to wood as an alternative energy source, and utility giant Uniper, Europe's biggest buyer of Russian gas, has had to tap into its winter emergency reserves.
The US has tried to prop up global supply with barrels from the Strategic Petroleum Reserve, and crude exports to Europe from January to May surpassed exports to Asia for the first time since 2016.
Treasury Secretary Janet Yellen has pushed for a Russian crude price cap to squeeze Moscow's ability to fund its war efforts, but Russia is now looking to launch its own national oil trading platform as a way to create a national benchmark akin to WTI or Brent, which would help it absorb the blow of sanctions.
In other news:
2. US stock futures rise early Monday amid a weaker dollar. Oil also rose and was trading at around $100 a barrel, while bitcoin rallied to trade above $22,000. Here are the latest market moves.
3. On the docket: Goldman Sachs and Bank of America headline earnings today, among others reporting.
4. A recession is beginning now, and in a worst-case scenario stocks could fall another 20%. BofA analysts said the stock market still can decline further and isn't close to staging a recovery. They broke down how to know when things are turning around and determine when markets hit rock bottom.
5. Sam Bankman-Fried is positioning himself as crypto's "lender of last resort" — but even the billionaire founder of FTX couldn't deal with the $2 billion hole in Celsius' balance sheet, according to a report. Here's the latest.
6. Goldman Sachs identified stocks to buy that have historically held up the best during previous recessions. The team evaluated the companies based on the expected change in their profit margins in 2023, and the average profit margin decline they've endured over the past three recessions. These are the 21 low-downside stocks analysts picked.
7. Cheaper oil and gas won't stop the Fed from making an aggressive interest rate hike this month. That's according to BofA analysts, who on Friday said a 75-basis-point move is likely, but there's still potential for a 100-basis-point rate hike. "[U]nderlying price pressures remain robust and unacceptably high relative to the Fed's mandate."
8. This brokerage founder explained the different stock sectors investors should stick to and which ones to avoid. In an interview with Insider, Jason Trennert said he's expecting a recession but that this downturn is different from others. Watch the full exclusive interview here.
9. Three Wall Street experts broke down what inflation surging to 9.1% means for Fed policy moving forward. Top market-watchers from BlackRock, Credit Suisse, and Global X dug into the implications of June's hot CPI reading. Here's where they think inflation and stocks are heading next.
10. Get ready for a summer of sales, as prices for everything from department store goods to high-end watches get deep discounts. Retail inventories are ballooning across the country because they have a backlog of pandemic-era products they need to offload. Here's what you want to know.
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Curated by Phil Rosen in New York. (Feedback or tips? Email prosen@insider.com or tweet @philrosenn).
Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.