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The EIA will release its monthly Short-Term Energy Outlook report in ten minutes.On September 9th, Irans Permanent Representative to the United Nations stated: "Once the war ends, preparations will be made for inspections by the International Atomic Energy Agency (IAEA). Iran has no undeclared nuclear materials or activities. This war was not initiated by Iran, and Iran bears no responsibility for it. As long as the conditions of war persist, we cannot expect the full implementation of the Comprehensive Safeguards Agreement, including the normal provision of information and access to the IAEA. If the war ends completely and permanently, preparations will be made for IAEA inspections. All parties must recognize that issues related to Irans nuclear program should be resolved solely through dialogue."On September 9th, the U.S. Treasury announced it would purchase a minimum of $4 billion and a maximum of $6 billion in long-term government debt in the first operation of its expanded repurchase program, demonstrating its determination to curb recent increases in borrowing costs. Treasury bonds continued their earlier decline following the announcement, suggesting the size of the announced purchase was smaller than some investors had expected. The success of the expanded purchase program remains to be seen. Yields fell after the programs initial announcement last month but subsequently rebounded. The benchmark 10-year yield reached its highest point since 2023 last week. "The challenge always lies in whether the effects of these interventions can be sustained without a major change in fundamentals," said Guha, an economist who previously worked at the New York Fed. Moreover, the maximum size of the repurchase operation does not necessarily mean the Treasury will purchase that amount of Treasury securities. However, in repurchases of long-term nominal debt, the department typically purchases the full amount, and has not done so in only two of the 52 such operations since the program was reintroduced in 2024.The German DAX 30 index closed down 408.73 points, or 1.57%, at 25,584.19 on Wednesday, September 9th; the UK FTSE 100 index closed down 142.34 points, or 1.32%, at 10,669.32 on Wednesday, September 9th; and the French CAC 40 index closed down 161.31 points, or 1.94%, at 8,156.67 on Wednesday, September 9th. The Stoxx 50 index closed down 100.42 points, or 1.57%, at 6312.75 on Wednesday, September 9; the Spanish IBEX 35 index closed down 305.77 points, or 1.53%, at 19691.33 on Wednesday, September 9; and the Italian FTSE MIB index closed down 307.97 points, or 0.59%, at 51869.50 on Wednesday, September 9.Türkiye, Pakistan, Saudi Arabia, the UAE, Qatar, Egypt, Jordan, and Indonesia welcomed the UKs decision to ban imports from illegal settlements in the West Bank.

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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