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The number of initial jobless claims in the U.S. fell last week, indicating that the U.S. labor market remains stable despite an unexpected drop in employment in July. The Labor Department said Thursday that seasonally adjusted initial claims fell by 4,000 to 203,000 in the week ending August 22, compared with economists expectations of 208,000. Initial claims are currently at the lower end of the years range of 189,000 to 230,000, suggesting that even with weak hiring activity, layoffs remain low. The U.S. unemployment rate fell slightly again last month to 4.1%, a historically low level. If the labor market continues to remain stable, the Federal Reserve may be able to continue focusing on controlling inflation. U.S. inflation has been above the Feds 2% target for 65 consecutive months. Data showed that continuing jobless claims fell by 18,000 to 1.778 million, an indicator that can be used as a reference for hiring.The U.S. goods trade deficit widened to its highest level since early last year in July, with imports surging, primarily driven by increased shipments of capital equipment. Data released by the Commerce Department on Thursday showed that the goods trade deficit widened by 17.2% in July from the previous month to $118.8 billion, the highest level since March 2025, compared to economists median forecast of $100.5 billion. The figures are unadjusted for inflation. Imports rose 3.7% in July, while goods exports fell 2.9%. The U.S. trade deficit has fluctuated in recent months. On the one hand, the war with Iran has boosted global demand for U.S. petroleum products; on the other hand, U.S. companies are stockpiling goods and raw materials to mitigate the impact of supply chain disruptions. Meanwhile, companies are adapting to changing tariff rates, and imports of artificial intelligence-related equipment remain strong.International oil prices rebounded somewhat and fluctuated near their intraday highs. A chart provides a quick overview of the pre-market conversion of domestic and international crude oil prices.Federal Reserves Goolsby: The biggest short-term concern right now is that inflation is out of control.Federal Reserves Goolsby: The current job market with low hiring and low layoffs is unusual.

WTI struggles at $87 as recession worries probe OPEC's forecast and supply deficit fears intensify

Daniel Rogers

Sep 14, 2022 11:42

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After reverting from the weekly high, WTI crude oil traders seek clear direction around $87.50 during Wednesday's Asian session. However, the present hesitation in the price of black gold may be attributable to the mixed concerns regarding the demand-supply matrix.

 

The Organization of the Petroleum Exporting Countries (OPEC) indicated in a monthly report that oil consumption will climb by 3,1 million barrels per day (bpd) in 2022 and by 2,7 million barrels per day (bpd) in 2023, which is unchanged from last month. Despite obstacles such as rising prices, the news also highlighted indications that major economies were performing better than projected.

 

The news that the United States intends to replenish its emergency oil reserves, as well as the German and European move to control Russian oil and gas prices, could also be favorable for energy prices. In addition, rumors that the Western oil deal with Iran is a long way off are bolstering fears of a supply bottleneck and should have helped energy bulls.

 

Tuesday's US inflation statistics revived concerns about the Federal Reserve's fast rate hike and exacerbated recession concerns. Also acting as downward drivers for WTI crude oil are expectations of economic slowdown due to China and Russia-related concerns.

 

In spite of this, the US Consumer Price Index (CPI) for August increased by 8.3% year-over-year, surpassing market expectations by 0.1%. However, the monthly data increased to 0.1%, exceeding the -0.1% projected and the 0.0% shown in previous assessments. The core CPI, or CPI excluding food and energy, likewise exceeded the 6.1% consensus and 5.9% prior to printing at 6.3% for the month in question.

 

It should be mentioned that the weekly prints of the American Petroleum Institute's (API) industry inventory report also contributed to the commodity's downfall. The API Weekly Crude Oil Stock climbed to 6,035 million during the week ending September 9, up from 3,645,000 the previous week.

 

In the future, the price of black gold may stay under pressure due to a stronger US dollar and economic troubles. Before today's official weekly inventory data from the U.S. Energy Information Administration, however, the supply crisis concerns could test the bears (EIA). Thursday's US Retail Sales for the month of August and Friday's preliminary reading of the September Michigan Consumer Sentiment Index will also warrant close attention.

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