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The yield on the two-year U.S. Treasury note fell to a six-month low of 3.6550% and was last at 3.6611%.On April 4, local time on April 3, U.S. Secretary of Health and Human Services Robert Kennedy Jr. said that about 20% of the layoffs in the Department of Government Efficiency were wrong and needed to be corrected. The U.S. Department of Health and Human Services laid off about 10,000 people on the 1st. Kennedy said that people who should not have been laid off were laid off, and the department is restoring their positions. Kennedy said that canceling the entire lead poisoning prevention and monitoring department of the Centers for Disease Control and Prevention was one of the mistakes. At present, it is unclear what other projects Kennedy may plan to restore.Bank of Japan Governor Kazuo Ueda: Will consider the impact of food costs on consumers.On April 4, local time on the 3rd, the automobile company Stellantis said that due to the impact of the US import automobile tariff policy, the company decided to lay off 900 employees in its five US factories and suspend production operations at two assembly plants in Canada and Mexico. Antonio Filosa, Chief Operating Officer of Stellantis Americas, said that the US factories that were laid off were powertrain and stamping parts factories, which produced spare parts for two assembly plants in Canada and Mexico. According to the plan, the assembly plant in Canada will stop production for two weeks, and the assembly plant in Toluca, Mexico will suspend production throughout April. Filosa said the company is "continuing to evaluate the medium- and long-term impact of tariffs on operations."Bank of Japan Governor Kazuo Ueda: Non-weather factors may push up food prices.

WTI struggles to prolong its two-day uptrend below $78, as negative sentiment undermines expectations for China-led oil demand

Daniel Rogers

Mar 02, 2023 15:46

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Following a two-day uptrend that reached the greatest levels in a fortnight, the price of WTI crude oil fluctuates between $77.80 and $90 early Thursday.

 

The recent struggles of the black gold may be related to the contradictory signals encircling China and the Oil equities. However, negative sentiment and the resurgence of the US Dollar appear to be the quote's greatest obstacles to the upside.

 

In addition, higher-than-anticipated US inventories weigh on the energy benchmark. The weekly data from the US Energy Information Administration (EIA) indicates a 1.165M increase in Oil inventories, compared to the expected 0.45M increase and the previous level of 7.648M.

 

The willingness of US President Joseph Biden to continue pumping the markets with the Strategic Petroleum Reserve (SPR) and the absence of offers for Russian Oil also exert downward pressure on the price of WTI crude oil.

 

The latest New York Times (NYT) headlines suggest a potential rift between the United States and China at the important event. According to the news, "China is urging the start of peace talks, and some Group of 20 nations may support that notion when they meet in India, but U.S. officials contend Russia would not negotiate in good faith."

 

It should be noted, however, that the recent uptick in China activity data and optimistic remarks from the dragon nation's policymakers keep black gold purchasers optimistic. China's Minister of Human Resources recently stated, "China's employment will continue to increase this year and remains stable overall." On Wednesday, China's Finance Minister Liu He expressed a willingness to increase the country's fiscal expenditure while noting that the foundation of China's economic recovery remains fragile.

 

However, hawkish remarks from policymakers of the US Federal Reserve (Fed), the Bank of England (BoE), and the European Central Bank (ECB) highlighted the need for additional rate hikes to combat inflation issues, which exerted downward pressure on the price of oil.

 

In response to these events, 10-year US Treasury bond yields surpassed 4% for the first time since early November 2022, while 2-year yields ascended to their highest levels since June 2007 by flashing 4.91%. The increase in US Treasury bond yields reflects the market's concerns, which in turn have impacted on bulls on Wall Street, S&P 500 Futures, and WTI bulls recently. Consequently, S&P 500 Futures were down 0.5 percent as of press time despite the varied closing of Wall Street benchmarks.

 

Moving on, G20 updates could be combined with comments from central bankers and secondary US data to amuse Oil traders.