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The main fuel oil contract fell 4.00% intraday, currently trading at 3807.00 yuan/ton.On September 3rd, Larry Holzenthal, Senior Portfolio Manager at Catalyst Funds, stated in a report that the driving factors behind recent bond market movements differ slightly across countries. One difference lies in the overall economic conditions and corporate earnings performance of various countries. US corporate earnings remain quite strong compared to the rest of the world, while performance in other regions has been somewhat mixed. Globally, government debt burdens are generally high, which is clearly causing market concerns about long-term bonds, and oil prices are also a contributing factor. The impact of energy prices varies across countries, but both oil and energy prices are playing a role. Inflation is undoubtedly also an issue.On September 3rd, Natalia Lojewski, Managing Director of CIFC Asset Management, stated in a report that the bond market has, to some extent, been playing a policy role for the Federal Reserve. She noted that the yield on the two-year U.S. Treasury note has been significantly higher than the federal funds rate for some time, "which in itself reflects the Feds monetary policy." She added that its not just the changes in the bond market that are noteworthy, but also the convergence in monetary policy expectations. "What are the Fed and the market currently pricing in? Roughly a 60% probability of a rate hike in September."On September 3rd, Bei Chen Lin, Senior Investment Strategist at Russell Investments, stated in a report that under the firms baseline scenario, the Federal Reserve is expected to keep interest rates unchanged this year. He said before Fridays US jobs report release, "However, if job growth significantly exceeds market expectations, for example, more than double the expected amount, while inflation remains unimproved, this could prompt the Fed to consider further rate hikes. Considering the various labor market data to be released this week, we expect the job market to be in a normal state, rather than overheated or oversold. This would be good news for the Fed." Russell Investments believes that all maturities of the US Treasury yield curve offer good investment value.On September 3, the National Medical Products Administration (NMPA) approved the marketing of rizabutinib tablets (trade name: Cerazetazone), a Class 1 innovative drug submitted by Genzyme Corporation. This drug is indicated for adult patients with persistent or chronic primary immune thrombocytopenic purpura (ITP) who have previously responded poorly to or are intolerant of treatments such as glucocorticoids and immunoglobulins. The approval of this drug provides patients with a new treatment option.

Fourth week of oil price declines as Fed uncertainty offsets decreasing supply

Charlie Brooks

Sep 23, 2022 11:04

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Concerns over headwinds from rising interest rates outweighed expectations that petroleum supply will tighten as a result of the Russia-Ukraine conflict, forcing oil prices to decline for the fourth consecutive week on Friday.


Concerns over rising interest rates worldwide, particularly in the wake of the Federal Reserve's increase this week, impacted on crude oil prices as traders predicted tighter liquidity conditions and greater impediments to economic growth.


Notwithstanding, oil prices recovered a portion of their weekly losses as Russia appeared set to extend its invasion of Ukraine, a move that could hamper oil shipments and reduce global supply this year. China and India, the two major importers in Asia, purchase significant volumes of crude oil from Russia. As a result of the Bank of England's smaller-than-anticipated interest rate increase, crude prices also experienced some relief.


London Brent oil prices jumped 0.2% to $90.50 per barrel at 20:37 ET, while U.S. West Texas Intermediate crude futures advanced 0.1% to $83.61 per barrel (00:37 GMT). This week, it was anticipated that both futures would lose 0.9% and 1.8%, respectively.


The Fed's more hawkish-than-expected position on U.S. monetary policy weighed most on oil prices this week, as the central bank warned it was prepared for threats to economic growth and the labor market in its fight against inflation. Additional European and Asian central banks tightened monetary policy this week.


Tighter monetary policy decreases market liquidity, which discourages crude buyers. In addition to slowing economic activity, high interest rates limit industrial demand for petroleum.


High inflation and high interest rates make it difficult for customers to acquire fuel. In addition, the U.S. government increased oil supply by withdrawing from its Strategic Petroleum Reserve, which has reduced prices in recent weeks.


As a result of Russian President Vladimir Putin's partial mobilization of troops for a military operation in Ukraine, crude prices jumped on Thursday. As was the case earlier in the year, a conflict escalation is likely to cause a shortage of supplies.


The European Union also reinforced its plans for a price cap on Russian oil, while Nigeria's oil minister, speaking on behalf of OPEC+, pledged to restrict output if oil prices continued to plummet.


Traders are currently caught between predicted demand headwinds resulting from rising interest rates and an anticipated supply tightening.


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