By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
AmextaFinanceAmextaFinance
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Notification Show More
Aa
AmextaFinanceAmextaFinance
Aa
  • Banking
  • Credit Cards
  • Loans
  • Dept Management
  • Mortgage
  • Markets
  • Investing
  • Small Business
  • Videos
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Follow US
AmextaFinance > Markets > Commodities > Oil up, ignoring dismal stockpiles data to focus on less-aggressive Fed
Commodities

Oil up, ignoring dismal stockpiles data to focus on less-aggressive Fed

News Room
Last updated: 2023/07/12 at 3:32 PM
By News Room
Share
7 Min Read
SHARE

Investing.com — It’s one thing to run ahead of the pack. It’s another to do so with the blinkers on, as oil bulls demonstrated Wednesday, charging into higher territory by ignoring bearish U.S. inventory data and a Fed official’s caution that cooling inflation did not mean the central bank was ready to stop rate hikes.

Contents
Fed’s Barkin says not time yet to stop rate hikes “Horrible, horrible demand numbers for gasoline”

New York-based West Texas Intermediate, or , crude settled up 92 cents, or 1.2%, at $75.75 per barrel. WTI earlier hit $76.08, its highest since April. The U.S. crude benchmark is up 2.6% on the week, extending last week’s 4.6% rally.

London-based gained 71 cents, or 0.9%, to finish the New York session at $80.11, after a near three-month high of $80.49. For the week, Brent is up 2% after last week’s 4.8% rally.

Oil’s latest run-up came after the Labor Department reported that the U.S. grew by just 3.0% in the year to June, expanding at its slowest pace in more than two years. Annual CPI was at 4.0% in May.

Even so, , measured by excluding volatile food and energy prices, rose 0.2% and was still up 4.8% from a year ago — more than double the Fed’s 2% target. That was an indication that while price pressures had eased in general, consumers were probably paying more than they should for everything, from what they stock in their refrigerator to what they put in the tank of their cars.

“Inflation is still too high,” Tom Barkin, Fed president for the region of Richmond, said at an event that began just after the release of the CPI data. “The demand seems to be settling down, but [the Fed] still looking to be convinced that will feed through to inflation. Demand remains elevated at the same time supply is constrained, the process of getting back to balance has been slow.”

Fed’s Barkin says not time yet to stop rate hikes 

Barkin also indicated that the Fed, which paused rate hikes in June to study its impact, will resume monetary tightening to get inflation back to its target. The central bank’s policy-makers will make their next decision on rates on July 26. Investing.com’s assigned a 94% probability of the central bank doing a 0.25% hike at its July policy meeting. 

The Fed’s tolerance for inflation is, meanwhile, just 2% per annum. In response to the runaway price growth caused by relief spending related to the coronavirus pandemic, the central bank has raised interest rates 10 times in March 2022, adding 5% to rates from a previous 0.25%. 

“We are comfortable doing more with policy if incoming data does not confirm inflation will return to target,” Barkin said on Wednesday. “Backing off too soon would require the Fed to do even more [later]. It is still a question whether inflation can settle while the labor market remains as strong as it is.” 

Aside from Barkin’s commitment to staying the course on rate hikes, oil longs also ignored something as or more pertinent — U.S. inventory data.

U.S. inventories jumped by their most in four weeks as early summer demand for motor fuels appears to have peaked after weeks of heavy processing by refiners trying to ensure adequate supply to market, the Energy Information Administration, or EIA, reported.

Stocks of gasoline were flat from a week earlier and those of distillates surged their most in five weeks, the EIA said in its Weekly Petroleum Status Report.

The U.S. jumped by 5.946 million barrels during the week ended July 7, versus the 1.508M barrel draw during the prior week to June 30. Industry analysts tracked by Investing.com had forecast a build of only 0.483M for last week.

The crude draw reported by the EIA also came with its usual caveat — a  release of crude from the U.S. Strategic Petroleum Reserve. But even that this time was marginal, amounting to just 0.4M barrels. If that was subtracted, the overall crude build would still be 5.5M or so. 

Even exports — one of the brightest spots of the U.S. oil market — were weak, with crude shipments down 1.757M barrels daily to 2.144M. Just a few weeks ago, crude exports were near the March all-time high of 4.5M barrels per day.

On the fuels side, were unchanged from the week earlier, the EIA said. Analysts had expected the agency to cite a draw of around 730,000 barrels instead, to add to the prior week’s pull of 2.55 million barrels. Automotive fuel gasoline is the No. 1 US fuel product.

“Horrible, horrible demand numbers for gasoline”

Worse, in terms of products supplied to the market — an indicator of demand at the pump, there was a drop of 0.844 million barrels daily to 8.756M per day and against last week’s 9.599M. That 8.756M was one of the lowest for an early summer season.

“These are horrible, horrible demand numbers for gasoline,” said John Kilduff, partner at New York energy hedge fund Again Capital. “If the uptake doesn’t pick up, prices will probably be stuck again like before, this time at mid-$70 levels instead of the previous low or sub-$70s.” 

In the case of , the EIA reported a build of 4.815M barrels. Analysts had forecast a draw of 0.262M barrels last week, against a previous drop of 1.045M. Distillates are refined into , diesel for trucks, buses, trains and ships, and fuel for jets.

Read the full article here

News Room July 12, 2023 July 12, 2023
Share this Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Finance Weekly Newsletter

Join now for the latest news, tips, and analysis about personal finance, credit cards, dept management, and many more from our experts.
Join Now
Elon Musk wants to launch a new political party. Here’s why some people think it won’t work.

Watch full video on YouTube

Why Even High Earners Are Living Paycheck To Paycheck

Watch full video on YouTube

Bank of America: Higher Yielding Preferred Stock Is Still Attractive (NYSE:BAC)

This article was written byFollowThe Investment Doctor is a financial writer, highlighting…

“Invest in what you know.”

Watch full video on YouTube

‘All the banks were lying’: Tom Hayes on his decade-long battle for justice

The last time Tom Hayes had his picture taken at London’s Southwark…

- Advertisement -
Ad imageAd image

You Might Also Like

Commodities

Russia mulls extra tax for some commodities exports, including metals – sources

By News Room
Commodities

Gold prices tumble as Fed talks higher rates

By News Room
Commodities

Crude oil prices endure downturn amid U.S. interest rate hike anticipation

By News Room
Commodities

China approves export licences for chip materials gallium, germanium

By News Room
Commodities

European energy crisis: ECB, IEA and EIB to strategize on systematic transition amid soaring prices

By News Room
Commodities

Federal Reserve interest rate signals prompt oil price dip

By News Room
Commodities

Oil prices inch closer to $100 per barrel amid inflation concerns

By News Room
Commodities

Brent Crude Prices May Hit $120 per Barrel, Warns JPMorgan

By News Room
Facebook Twitter Pinterest Youtube Instagram
Company
  • Privacy Policy
  • Terms & Conditions
  • Press Release
  • Contact
  • Advertisement
More Info
  • Newsletter
  • Market Data
  • Credit Cards
  • Videos

Sign Up For Free

Subscribe to our newsletter and don't miss out on our programs, webinars and trainings.

I have read and agree to the terms & conditions
Join Community

2023 © Indepta.com. All Rights Reserved.

YOUR EMAIL HAS BEEN CONFIRMED.
THANK YOU!

Welcome Back!

Sign in to your account

Lost your password?