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On August 11th, analyst James Glynn stated that the Reserve Bank of Australias revised economic forecasts indicate that the bank is approaching a comfortable level for its current policy. The unemployment rate path has been revised upwards; the RBA now expects the unemployment rate to reach 4.5% by December, higher than the previous forecast of 4.3%. The biggest change is in inflation. Overall CPI is now projected at 3.6% by December, lower than the previous forecast of 4.0%. The cut-off mean inflation rate has been revised downwards, projected at 3.3% by December, lower than the previous forecast of 3.5%, and is expected to reach 2.4% by June 2028. All these indicators suggest that the RBA is nearing the end of its tightening cycle.Reserve Bank of Australia Governor Bullock: The committee is seriously considering when it would be appropriate to raise interest rates.Maersk: Logistics operations in parts of Colombia are currently facing disruption due to the earthquake affecting multiple regions.August 11th - InvestingLive, a US financial website, reported that the Reserve Bank of Australias (RBA) interest rate decision was in line with expectations. The RBA did not express excessive concern about recent inflation trends, but its forward guidance did see some minor adjustments. While not explicitly pointing to further tightening measures, policymakers wanted the market to know that inflation risks are now skewed to the upside, no longer a two-sided risk scenario. Therefore, the wording of this statement was clearer regarding its policy priorities. The RBA also included a timeline, indicating that inflation is unlikely to fall back to its target level by the end of next year. This leaves some room for further rate hikes in the near future if necessary. The unanimous decision itself did not leave much room for traders to maneuver. Essentially, the RBA reiterated that they acknowledge the possibility of raising the cash rate again if necessary, but are not in a hurry to do so. Before the decision was announced, traders priced in a 97% probability of no change at this meeting. Therefore, this is more or less in line with market expectations.On August 11, Iranian President Manuel Pezechzian stated that his recent meeting with Irans Supreme Leader Mojtaba Khamenei lasted seven to eight hours, during which various topics were discussed in depth. Pezechzian also stated that the most important task at present is to prevent internal division, and that all of the enemys plans are aimed at creating division within Iran. Earlier that day, Pezechzian had also said that Mojtaba was in "very good health."

After Geopolitical Worries, Oil Sales Resume

Skylar Williams

Nov 17, 2022 15:40

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Even a big drop in U.S. crude stocks does not appear to be sufficient to guarantee an increase in oil prices at this time.


Crude oil futures resumed their drop on Wednesday, as supply concerns that had supported the market in the previous session faded away.


Also striking was the dealers' disregard for weekly Energy Information Administration (EIA) inventory data.


For the week ending November 11, the EIA reported a crude inventory decrease of 5.4 million barrels, compared to the expected decrease of 440,000 barrels and the previous week's decrease of 3.925 million barrels. During the previous week, U.S. crude imports decreased by an average of 900,000 barrels per day, or more than 6.0 million barrels in total.


Nonetheless, the market remained fixated on the resumption of Russian oil exports to Hungary via the Druzhba pipeline and the rise in Covid-19 infections in China.


According to operators of oil pipelines in Hungary and Slovakia, a portion of the Druzhba pipeline was temporarily shut down for technical reasons on Tuesday, halting the flow of oil to portions of Eastern and Central Europe. Wednesday, Peter Szijjarto, the Hungarian foreign minister, announced that Russian oil supplies through the Druzhba pipeline have resumed.


After a tanker sustained minor damage off the coast of Oman on Tuesday, both New York-traded West Texas Intermediate crude and London's Brent crude rose early on Wednesday, highlighting the geopolitical dangers in the world's busiest oil shipping routes.


"Various geopolitical influences, such as an oil tanker being struck by a bomb-carrying drone off the coast of Oman and Russia tensions, are being largely ignored in favor of more bearish elements, such as weak Chinese economic data and demand," said Matt Smith, oil analyst at Kpler, in comments carried by Reuters.


The rising incidence of COVID-19 in China reduced morale following this week's easing of virus restrictions. Chinese officials shut down Peking University after discovering a single COVID case, demonstrating their unwavering commitment to the country's zero-COVID policy.


Beijing also reported over 350 new Covid cases in the past 24 hours, according to the Associated Press, which represents a negligible portion of the city's 21 million population but is sufficient to trigger localized lockdowns and quarantines under China's zero-Covid plan. This week, China recorded nearly 20,000 new cases, compared to 8,000 the week before.


Wednesday, oil's selling pressure was attributed to options expiry, which may frequently amplify market direction changes.


Despite this, WTI for December delivery finished at $85.59 a barrel, down $1.33, or 1.5%. The benchmark for U.S. crude declined by 4% week-to-date, the same as the previous week.


Brent for January delivery decreased $1, or 1.07 percent, to $92.86. After a decline of 2.6% the previous week, the global crude benchmark dropped over 3.5% for the week.


Aside from the crude decrease, the EIA's weekly statistics on fuel products were negative, with a larger-than-anticipated increase in gasoline and an unexpected increase in distillate stocks.


The Biden administration's depletion of petroleum from the U.S. Strategic Petroleum Reserve was similarly below average, at around 4 million barrels compared to summer highs of eight million barrels.

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