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RSM Chief Economist Joseph Brusueras: Warsh delivered the right hawkish signals at the press conference and attempted to reinforce the Fed’s credibility in restoring price stability, while also enhancing his own credibility.U.S. stocks continued to decline after the Walsh press conference, with the S&P 500 falling 1%, its biggest drop since July 29, the Dow Jones Industrial Average down 1.65%, and the Nasdaq Composite down 0.6%.On September 17th, Federal Reserve Chairman Warsh declined to answer questions at a press conference regarding his interactions with US President Trump. Trump has been calling for lower interest rates in recent months. Warsh stated, "I have no comment on my discussions with the president." White House Council of Economic Advisers Chairman Christopher Phelan said on Tuesday that raising interest rates would be a "mistake."On September 17th, Federal Reserve Chairman Warsh stated that he would not disclose details of future interest rate decisions by the Federal Open Market Committee (FOMC). He said, "I am not responsible for providing forward guidance. Our decision today (to raise interest rates) is a carefully considered, serious, and responsible one. We have been preparing for and thinking about this decision for the past 110 or 120 days." Warsh also stated that this decision was not market-driven. He said, "Our decision today is based on our assessment of the current situation, our judgment of the employment trend, and our assessment of the strength of the economy. Sometimes, the market tries to anticipate our decisions. I watch market prices to see what information the market is sending. But todays decision is our own."On September 17th, Warsh stated that while the Federal Reserve cannot prevent price shocks in commodities such as oil on its own, the central bank can use policy tools to prevent further spread of inflationary pressures. Warsh said, "We cannot influence the price of any single commodity, such as oil or groceries." However, he pointed out, "We can and will ensure that any changes in relative prices do not spread further, and do not have second- or third-order effects on the economy. Thats our responsibility, and thats what were doing." Warsh made these remarks as U.S. diesel prices hit a record high due to the Iran war.

Oil prices fall as rising COVID cases in China reignite fuel demand concerns

Skylar Williams

Jul 18, 2022 11:00

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Oil prices fell $1 in early trade in Asia on Monday, erasing Friday's gains, as attention reverted to rising COVID-19 cases in China and the likelihood of gasoline consumption restrictions in the world's top oil importer.


Futures for August delivery of U.S. West Texas Intermediate (WTI) oil declined $1.54, or 1.6%, to $96.05 a barrel at 00:55 GMT on Saturday, after gaining $1.91 on Friday.


Brent oil futures for September delivery fell $1.47, or 1.5 percent, to $99.69 a barrel, paring Friday's gain of 2.1%.


China, the second-largest oil consumer in the world, reported 691 new COVID cases on Saturday, up from 547 the previous day, and the highest number of locally transmitted cases since May 23.


"Oil opens the week lower as the market digests the demand impact of the increase in new COVID cases in China and as the market cautiously awaits the monumental event risk of whether Nord Stream 1 gas flow from Russia to Europe will resume later this week," said Stephen Innes, chief executive officer of SPI Asset Management.


The largest system carrying Russian natural gas to Germany, the Nord Stream 1 pipeline, commenced 10 days of annual maintenance on July 11. Due to the war in Ukraine, governments, markets, and companies are afraid that the shutdown might be prolonged.


This gas loss would have a devastating impact on Germany, the fourth-largest economy in the world, and raise the possibility of a recession.


As predicted, Vice President Joe Biden's trip to Saudi Arabia generated no pledge to raise oil output from the biggest OPEC producer. Prior to Biden's meeting with Saudi Crown Prince Mohammed bin Salman, this belief in an impending oil scarcity led to last Friday's price increase.


Biden wants Gulf oil firms to raise output in an effort to lower oil prices and inflation.


Amos Hochstein, a senior counselor for energy security at the U.S. State Department, indicated on CBS' Face the Nation on Sunday that the trip will result in oil producers taking "a few more steps" in terms of supply, but he did not identify which nation(s) will raise output.


As their current output agreement expires in September, the August 3 meeting of the Organization of Petroleum Exporting Countries (OPEC) and its partners, including Russia, known collectively as OPEC+ will be closely watched.

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