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On July 9th, InvestingLive analyst Adam Button stated that the Federal Reserves June meeting minutes released a hawkish signal, indicating that officials remain highly concerned about inflation risks. Button believes the Feds policy focus is shifting, with market attention moving from "when to cut rates" to "whether to raise rates." The minutes showed that some officials expect interest rates to be higher than current levels by the end of the year. He also pointed out that core inflationary pressures in the US remain significant, with rising prices in areas such as airfares and petrochemicals suggesting that inflation is not entirely driven by short-term factors. Overall, there is increasing disagreement within the Fed regarding the future path of interest rates, but high inflation remains a key factor influencing policy direction.July 9th - Federal Reserve meeting minutes revealed that policymakers still expect "real GDP to maintain solid growth" for the remainder of 2026. They also noted that multiple employment indicators suggest the labor market remains stable and does not appear to be a source of inflationary pressures. The June 17th statement was shorter than those released after recent meetings, foreshadowing action from Warsh, who has pledged to radically change the Feds communication strategy. The minutes showed that several officials agreed it was time to consider significant revisions to the post-meeting statement.US Secretary of State Marco Rubio: Lifting sanctions on Syria will open the door to international trade and investment and give Syria an opportunity to rebuild.July 9th - The minutes of the Federal Reserves June policy meeting revealed a significant divergence of opinion among officials regarding the future direction of interest rates. Some policymakers believed inflation might ease, creating conditions for a rate cut; others were concerned about persistent price pressures and thought a rate hike might be necessary. At the meeting held on June 16-17, the Fed unanimously decided to maintain the benchmark interest rate at 3.5% to 3.75%. However, discussions showed differing opinions among policymakers regarding the year-end interest rate level. Some officials believed that the rate might be close to or even slightly lower than current levels by the end of the year; others believed that rates might need to be higher than current levels. The Fed stated that future policy will be adjusted based on economic data such as inflation and employment.July 9th - The Federal Reserve meeting minutes stated, "Most participants emphasized that if inflation remains above 2% for several consecutive years, persistently high inflation could begin to affect inflation expectations and wage and price setting decisions." Fed officials also indicated that their inflation forecasts for this year and next are higher than those set at the April meeting, again demonstrating concerns about inflation. Staff predict that core inflation, already above 3%, will remain largely unchanged for the remainder of the year.

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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