International oil prices remain stable, and prospects for a recovery in demand are improving, offsetting the expected acceleration of FED hawks
On Wednesday (September 14), international oil prices were basically stable. Despite US consumer prices unexpectedly rising in August and fears that the Federal Reserve will further accelerate interest rate hikes next week, two industry groups are predicting strong demand growth ahead.
At 16:22 Beijing time, NYMEX crude oil futures rose 0.10% to US$87.40/barrel; ICE Brent crude oil futures rose 0.07% to US$92.27/barrel.
OPEC on Tuesday reiterated its forecast for global oil demand growth in 2022 and 2023, citing signs that major economies are doing better than expected despite headwinds such as rising inflation.
In its monthly report, OPEC said oil demand would rise by 3.1 million bpd in 2022 and 2.7 million bpd in 2023, unchanged from last month. “Oil demand in 2023 is expected to continue to be supported by the robust economic performance of high-consuming countries, as well as potential improvements in Covid-19 restrictions and reduced geopolitical uncertainty.”
The International Energy Agency (IEA) said on Wednesday it had lowered its forecast for demand growth this year by 110,000 bpd to 2 million bpd, with rich countries in the Organization for Economic Co-operation and Development (OECD) accounting for most of the growth this year. . But the IEA said global oil demand growth would improve strongly in 2023, with countries outside the OECD supporting growth next year.
However, the US Labor Department released higher-than-expected inflation data for August on Tuesday (September 13), and the market is worried that the Federal Reserve could increase interest rates further this month, and through that put pressure on dollar denominated goods. According to the latest data from the CME Group’s “FedWatch” tool, the Federal Reserve has decided to raise interest rates by at least 75 basis points for the third time in a row this month, and the probability of raising interest rates by 100 basis points more. than 30%.
A strong dollar and expectations of another huge rate hike from the Federal Reserve weighed on market sentiment. The United States is the biggest uncertainty, and if the demand forecast weakens, oil could resume its downward path since the beginning of the summer. “
The United States may start replenishing its emergency oil reserves when crude falls below $80 per barrel, Bloomberg reporters said on Twitter, citing unnamed sources. The Biden administration began releasing the Strategic Petroleum Reserve this year to curb a surge in prices caused by high energy prices.
American Petroleum Institute (API) inventory data released overnight showed that US crude oil inventories unexpectedly rose by 6.035 million in the week to September 9. The US Energy Information Administration’s (EIA) official weekly inventory data will will be released at 22:30 Beijing time on Wednesday.
