EUR/USD 1.15291
0.040%
Gold 4432.28
0.541%
Oil 81.395
-0.327%
USD/JPY 159.337
-0.049%
GBP/USD 1.34986
0.033%
GBP/JPY 215.088
-0.009%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
According to the Wall Street Journal, sources say Mexico is pushing for lower auto tariffs in the USMCA negotiations.Japans corporate goods price index rose 7.2% year-on-year in July, below the expected 7.4% and the previous reading of 7.10%.Japans corporate goods price index rose 0.1% month-on-month in July, below the expected 0.60% and the previous reading of 0.40%.Futures News, August 13th - According to foreign media reports, Chicago Board of Trade (CBOT) soft red winter wheat futures closed sharply higher on Wednesday, with the benchmark contract rising 3.6%, mainly reflecting the ongoing conflict between Russia and Ukraine, which has disrupted grain exports from the region. Ukrainian President Zelensky stated that this "unique operation" targets the last major stronghold of the Russian Black Sea Fleet. The ongoing conflict between the two countries continues to restrict agricultural exports from the region and has also caused some commodity prices to fluctuate wildly during the conflict.On August 13th, a research report from CICC stated that the seasonally adjusted CPI in the US rose 0.1% month-on-month and 3.4% year-on-year in July, while core inflation rose 0.2% month-on-month and 2.5% year-on-year, both in line with market expectations. Energy prices continued to decline, but international oil prices have rebounded since August, increasing uncertainty about future energy prices. Regarding core inflation, commodities were relatively strong while services were relatively weak, especially with the continued rise in prices of information technology products such as computers and software, reflecting that the supply-demand mismatch caused by the expansion of AI capital expenditure is gradually being transmitted to the consumer side. We believe that US inflation may have entered a new phase, with its driving force gradually shifting from supply shocks such as tariffs and oil prices to demand expansion driven by AI investment, and the duration of inflation may be correspondingly prolonged. For the Federal Reserve, this data alleviates the pressure for short-term interest rate hikes, but demand-pull inflation requires more attention from policymakers than supply-push inflation.

As nervous inflation counters good demand data, oil prices tumble

Skylar Williams

Sep 14, 2022 10:44

26.png


On Wednesday, oil prices dipped somewhat due to concerns regarding faster-than-expected U.S. economic expansion. The CPI inflation data undermined OPEC's estimate of solid demand and evidence that U.S. gasoline demand remained robust.


London Brent oil futures fell 0.3% to $93.23 a barrel, while U.S. West Texas Intermediate futures climbed 0.1% to $87.39 per barrel at 20:59 EDT (00:59 GMT). On Tuesday, both contracts decreased as stronger-than-expected U.S. inflation data strengthened the dollar and spurred a sell-off across key asset classes.


Nonetheless, encouraging signals from the Organization of Petroleum Exporting Countries (OPEC) aided in preventing further oil price drops.


Despite inflationary challenges, the cartel noted in a monthly report on Tuesday that it expects oil consumption to climb gradually in 2022 and 2023 due to the resilience of major economies.


OPEC anticipates an increase in oil consumption of 3,1 million barrels per day (bpd) in 2022 and 2,7 million barrels per day (bpd) in 2023.


The American Petroleum Institute said that gasoline inventories in the United States continued to fall for the week ending September 9, indicating that consumers were encouraged by the recent reduction in fuel prices.


While overall U.S. oil inventories grew unexpectedly, a sizable chunk of this increase is likely related to a drawdown from the Strategic Petroleum Reserve.


It is anticipated that official data from the Energy Information Administration will reflect a weekly increase in oil inventories later today. Nonetheless, gasoline inventories are expected to decline.


As investors expected that rising inflation and interest rates would have a negative effect on crude consumption, oil prices have fallen from their early-year peaks. China, the world's largest oil importer, has had a rash of COVID-related lockdowns, casting questions on the sustainability of crude demand this year.


Rising interest rates may also induce a U.S. recession, which is projected to weaken demand. In response to Tuesday's CPI news, the markets are already pricing in a series of significant interest rate hikes this year as the Fed strives to rein in inflation.


Suggestion