The Fed meeting starts, the market is worried about raising interest rates too sharply to dampen demand Crude oil closed near a 2-week low | Anue Juheng

The Fed meeting starts, the market is worried about raising interest rates too sharply to dampen demand Crude oil closed near a 2-week low | Anue Juheng
The Fed meeting starts, the market is worried about raising interest rates too sharply to dampen demand Crude oil closed near a 2-week low | Anue Juheng

Crude oil futures prices closed lower on Tuesday (20th), WTI and Brent crude oil futures both hit their lowest closing prices in nearly two weeks, because the US Federal Reserve (Fed) began a two-day policy meeting and is expected to raise interest rates again sharply, This could eventually lead to a slowdown in energy demand.

energy commodity prices
  • WTI crude for October delivery fell $1.28, or 1.5%, to settle at $84.45 a barrel, its lowest close since Sept. 8. The futures are due to close today.
  • WTI crude oil futures for November delivery fell $1.42, or 1.7%, to settle at $83.94 a barrel, the most actively traded WTI crude oil futures, which turned to nearest-month futures after the close today.
  • Brent crude for November delivery fell $1.38, or 1.5%, to settle at $90.62 a barrel, also hitting its lowest close since Sept. 8.
  • Gasoline futures for October delivery fell 0.7% to settle at $2.4478 a gallon.
  • Thermal fuel oil futures for October delivery rose nearly 1.9% to settle at $3.3722 a gallon.
  • Natural gas futures for October delivery fell nearly 0.5% to settle at $7.717 per million Btu.
market driving force

Like other market players, oil traders are keeping a close eye on the Fed, expecting at least a 75 basis point rate hike when it ends its two-day meeting on Wednesday, with the Fed funds futures market already pricing in a rate hike, analysts said. 100 basis points of external possibility.

Aggressive monetary tightening by the Fed and other major central banks has weighed on crude oil, fueling fears of a global economic slowdown or recession that could hit demand.

“We continue to believe that the oil market is in the process of finding a foundation,” analysts at Sevens Report Research said on Tuesday.

“However, this week’s hawkish Fed could further fuel fears of a hard landing, and the dollar’s continued rally will certainly put the recent lows near $80 a barrel to the test as they head into the weekend.”

Analysts at Sevens Report said that if the dollar hits record highs and the global economic outlook dims, the entire sector is expected to come under pressure amid concerns that central bank policy around the world will be overly restrictive. “Plunging the global economy into a recession would negatively impact everything from industrially sensitive commodities like energy and industrial metals, to precious metals and grains.”

“Conversely, a less hawkish stance from the Fed could help trigger a loosening rally in various commodities.”

ING’s head of commodity strategy Warren Patterson reports that the market sees lower refinery margins as a drag on crude. “Margins are under pressure because of reports that China may increase export quotas for refined products, and the refined product market has been tight for most of this year, so many markets may be happy to see Chinese supplies.”

In related news, the U.S. Department of Energy issued a sale notice on Monday that it will sell as much as 10 million barrels of crude oil from the U.S. Strategic Petroleum Reserve (SPR) in November.



The article is in Chinese

Tags: Energy afterhours Fed meeting starts market worried raising interest rates sharply dampen demand Crude oil closed #2week Anue Juheng

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