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RSM Chief Economist Joseph Brusueras: Warsh delivered the right hawkish signals at the press conference and attempted to reinforce the Fed’s credibility in restoring price stability, while also enhancing his own credibility.U.S. stocks continued to decline after the Walsh press conference, with the S&P 500 falling 1%, its biggest drop since July 29, the Dow Jones Industrial Average down 1.65%, and the Nasdaq Composite down 0.6%.On September 17th, Federal Reserve Chairman Warsh declined to answer questions at a press conference regarding his interactions with US President Trump. Trump has been calling for lower interest rates in recent months. Warsh stated, "I have no comment on my discussions with the president." White House Council of Economic Advisers Chairman Christopher Phelan said on Tuesday that raising interest rates would be a "mistake."On September 17th, Federal Reserve Chairman Warsh stated that he would not disclose details of future interest rate decisions by the Federal Open Market Committee (FOMC). He said, "I am not responsible for providing forward guidance. Our decision today (to raise interest rates) is a carefully considered, serious, and responsible one. We have been preparing for and thinking about this decision for the past 110 or 120 days." Warsh also stated that this decision was not market-driven. He said, "Our decision today is based on our assessment of the current situation, our judgment of the employment trend, and our assessment of the strength of the economy. Sometimes, the market tries to anticipate our decisions. I watch market prices to see what information the market is sending. But todays decision is our own."On September 17th, Warsh stated that while the Federal Reserve cannot prevent price shocks in commodities such as oil on its own, the central bank can use policy tools to prevent further spread of inflationary pressures. Warsh said, "We cannot influence the price of any single commodity, such as oil or groceries." However, he pointed out, "We can and will ensure that any changes in relative prices do not spread further, and do not have second- or third-order effects on the economy. Thats our responsibility, and thats what were doing." Warsh made these remarks as U.S. diesel prices hit a record high due to the Iran war.

Oil Prices Fall Due to Profit-taking, But Supply Concerns Persist

Haiden Holmes

May 16, 2022 10:16

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Oil prices declined on Monday, erasing earlier gains as speculators booked profits following the previous session's jump, but global supply concerns persisted as the European Union prepared to phase out imports from Russia.


At 01:37 GMT, Brent crude futures decreased 64 cents, or 0.6%, to $110.91 per barrel, while U.S. West Texas Intermediate (WTI) crude futures decreased 60 cents, or 0.5%, to $109.89 per barrel.


Both benchmarks gained by around 4 percent on Friday, with WTI reaching its highest level since March 28 at $111.71 per barrel.


The chief analyst of Fujitomi Securities Co Ltd, Kazuhiko Saito, expects oil markets to rise this week due to an impending ban on Russian oil by the European Union, which will further constrict global crude and fuel supply.


Despite concerns over supplies in eastern Europe, the EU still intends to approve a phased embargo on Russian oil this month, four diplomats and officials said on Friday, dismissing suggestions of a delay or watering down of proposals.


Moscow, which describes its efforts in Ukraine as a "special military operation," sanctioned numerous European energy businesses last week, prompting supply concerns.


In the meantime, U.S. gasoline futures established a new record high on Monday as dwindling inventories fueled supply fears.


Saito of Fujitomi Securities stated, "Oil prices remained bullish, especially WTI's near-term contract, as U.S. gasoline prices continued to grow despite decreased imports of petroleum products from Europe."


On the supply side, U.S. energy businesses added oil and natural gas rigs for the eighth consecutive week in the week ending May 13, as high prices and government encouragement spurred drillers to return to the wellpad.


Elsewhere Due to under-investment in oilfields by several Organization of the Petroleum Exporting Countries (OPEC) members and, more recently, output losses by Russia, OPEC+ has fallen short of previously agreed-upon targets for output increases.


OPEC's output in April increased by 153,000 barrels per day (bpd) to 28.65 million bpd, falling short of the 254,000 bpd increase permitted under the OPEC+ agreement.

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