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ECB Governing Council member Simkus: The new forecasts may lead to a slight upward adjustment in the interest rate path.The Federal Aviation Administration has proposed imposing flight restrictions around Palm Beach Airport because of its proximity to President Trumps winter residence.On September 1st, Federal Reserve Governor Michael Barr stated that the Fed should be prepared to raise interest rates if inflation fails to subside. He warned that inflation has been consistently above target for over five years, and there is a deep-seated risk of entrenched price pressures. Barr indicated that policymakers can remain patient if upcoming data shows inflation is cooling. In prepared remarks at an event in Washington on Tuesday, Barr said, "If the data trends give me confidence that inflation is moderating and moving toward the 2% target, then I think we can take more time to assess the policy stance. But if inflation doesnt appear to be cooling by a sufficient margin, then I think we should act decisively and raise interest rates."On September 1st, NIOs Chief Financial Officer, Qu Yu, stated at the companys interim results conference that the company is facing significant cost pressures this year. Starting in March, the costs of memory, bulk materials, and batteries have all increased, with the average cost per vehicle in the second quarter rising by approximately 14,000 yuan compared to the end of last year. There is a risk that material costs will continue to rise in the second half of the year, expected to be between 2,000 and 3,000 yuan. "NIOs goal is to maintain the gross profit per vehicle at the level of the second quarter in the third and fourth quarters."Federal Reserve Governor Barr: Persistent inflation above target poses risks.

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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