The rise and fall of oil, race for inventories and what matters in the market

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Countries rush to stockpile food

With the war in Ukraine putting pressure on the prices of important commodities for the world, large grain consuming and producing countries began to increase their inventories of inputs.

Thus, the supply of these items should be even more impaired, which contributes to the rise in prices.

Understand: the war raging in Ukraine and the sanctions imposed on Russia are hampering the supply of commodities such as wheat and corn. The two countries concentrate around 25% of world exports of the first and almost 15% of the second.

In numbers: the drop in supply has already hurt regulatory grain inventories, which are at their lowest level in eight years in the world. As a result, prices, which were already heated up before the war, are expected to rise another 20% because of the conflict.

The data are from FAO, the UN body for food and agriculture.

countries which announced measures to hold stock:

• Egypt this week suspended its exports of wheat, flour, lentils and beans. The country is heavily dependent on wheat that comes from Russia and Ukraine.
• Indonesia has adopted a heavy restriction on exports of vegetable oils, used in the kitchen and in the cosmetics and chocolate industries.
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• Argentina has indefinitely suspended exports of soybean meal and oil, of which it is the main exporter in the world. Last week, soybean oil accumulated a high of 171% in the last two years in Brazil, according to the column Vaivém das Commodities.

Cyberattacks could get worse in Ukraine

Although the Russian cyber offensive has already hit some networks and websites in Ukraine, these attacks have not been as refined as experts had hoped for this type of conflict.

This could be a sign that the worst is yet to come, says Kaspersky, a Russian cybersecurity company

Understand: Russia is considered one of the countries where there are groups with great power to wreak havoc on digital infrastructure networks.

Fight on both sides: The conflict between Russia and Ukraine is also marked by groups acting on behalf of each country in the cyber field.

For the Ukrainians, famous hacker activism groups, such as Anonymous, began to attack Russian entities with data leakage and messages of support for the invaded country on Russian screens.

More on the war in Ukraine:

Oil below $100

The barrel of Brent oil, an international benchmark, was once again quoted below the $100 this Tuesday (15th). At the end of the day, he was worth US$ 98.50 (R$ 505), with a drop of more than 8%.

The triple-digit level had been reached the day Russia invaded Ukraine. The commodity came close to an all-time high last week, but prices have cooled since then.

What explains: Oil prices have fallen in recent days with market expectations for an advance in diplomatic negotiations between Russia and Ukraine and were also pressured by the high number of Covid-19 cases registered in China.

The high contagion has caused China to restrict circulation in key industrial regions of the country, which could end up affecting demand for oil in one of the largest economies in the world.

Repercussion: as fuel prices in Brazil are linked to the variation of the commodity abroad, the drop has once again attracted attention to Petrobras’ pricing policy.

• President Jair Bolsonaro (PL) charged the companies and said that “certainly” the state-owned company will reduce the price of fuel. The president has intensified his criticism of the state-owned company since last weekend.
• With the sequence of declines, the average price of diesel in Brazil BRL 0.27 per liter above import parity, while the liter of gasoline is BRL 0.05 below.
• Before last week’s mega-increase, the lag came to be 40% for diesel. It is because of this rise and fall and the difficulty in bringing diesel to the country that the sector says that it is not yet time to reduce prices in refineries.

In the purse: the Ibovespa fell 0.88%at 108,959 points, and the dollar rose again, 0.80%, the BRL 5.16.

In addition to the Covid in China, which brought down prices of other important commodities for B3 companies, such as iron ore, market expectations for this Wednesday’s monetary policy decisions in the US and Brazil set the tone for the trading session.

The Goal in the Dock

Meta, owner of Facebook, is on the radar of authorities in several countries. This Tuesday, it was Ireland’s turn to fine the company for violating data protection rules and South Africa to accuse it of market dominance.

In Ireland, the fine of 17 million euros (R$95.7 million) came after an investigation into 12 cases of illegal use of user data. The country, for charging less taxes from technology companies, is home to several big American techs.

• That is why the nation often functions as a European regulator for EU data protection matters. Meta states that this fine refers to practices from 2018, which have been updated since then, and not a failure to protect people’s information.

In South Africa, the local competition commission took the company to court for abuse of a dominant position in the market. The body said the company excluded GovChat (a startup that connects government and citizens) from its WhatsApp business tool.

• The messaging network defended the deletion of GovChat, saying the startup was not abiding by the company’s terms of service.

It’s not just the Goal: Mark Zuckerberg’s company is not the only big tech company to face lawsuits in several countries. In recent months, Apple, Amazon and Google have also been fined for measures considered to be market concentration.