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June 24th - The U.S. current account deficit widened to $226.8 billion in the first quarter, an increase of $5.8 billion, or 2.6%, from the revised $221.1 billion in the fourth quarter of last year. The current account deficit as a percentage of GDP rose slightly to 2.9% from 2.8%. The widening deficit was not due to trade. The goods trade deficit actually narrowed, with exports of goods and services jumping $50 billion to $1.38 trillion. The main drag came from primary income, which shifted from a surplus in the fourth quarter to a deficit in the first quarter. This account reflects the difference between the returns on foreign assets held by U.S. residents and the returns on U.S. assets held by foreign residents. This shift reveals a change in relative returns and rising costs of financing an increasingly unbalanced balance sheet. It is noteworthy that the annual revision was substantial. The fourth-quarter deficit was revised to -$221.1 billion from an initial -$190.7 billion, and the net international investment position was also revised by nearly $6 trillion.The U.S. current account deficit in the first quarter was $226.8 billion, compared to an expected deficit of $215 billion and a revised deficit of $221.1 billion in the previous quarter (originally reported as $190.7 billion).On June 24th, Capital.com analyst Daniela Hathorn stated in a report that upcoming US data will determine whether the dollars current rally has further room to grow. She said that if inflation and labor market data continue to support the narrative that interest rates will remain high for an extended period, the dollar should continue to be supported. If price pressures begin to ease more quickly, the market may begin to question whether current interest rate expectations have become too aggressive. PCE data (the Feds preferred inflation gauge) and unemployment claims data will be released on Thursday, and the non-farm payrolls report will be released on July 2nd.Market expectations for a Fed rate hike deepened, causing spot gold and silver prices to plummet. A chart provides a quick overview of the pre-market conversion prices of gold and silver between domestic and international markets.On June 24th, MillTech analyst Nick Wood stated in a report that British investors are eager to know who will be appointed Chancellor of the Exchequer, as current Chancellor Reeves is likely to be replaced following Starmers resignation as Prime Minister this week. The Chancellors selection may be just as important to market confidence as the new Prime Minister. Investors are eager to understand the economic policies of the new leadership team. Given the lack of other competitors, leading candidate Andy Burnham seems increasingly likely to be appointed as the new Prime Minister without any rivals.

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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