Get Breaking Alerts on Stocks Before The Mainstream Media

Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
Email address
We guarantee you to keep your privacy
Connect with us
Financial Press
futures-movers:-oil-prices-fall-as-traders-worry-that-an-expected-fed-rate-hike-will-hurt-energy-demand
futures-movers:-oil-prices-fall-as-traders-worry-that-an-expected-fed-rate-hike-will-hurt-energy-demand

Breaking

Futures Movers: Oil prices fall as traders worry that an expected Fed rate hike will hurt energy demand

Oil futures head lower on Tuesday as the Federal Reserve prepares to kick off a two-day policy meeting that’s expected to result in another supersize rate increase that could eventually lead to a slowdown in energy demand.

Price action
  • West Texas Intermediate crude for October delivery
    CL.1,
    -1.73%

    CLV22,
    -1.73%

    fell $2.21, or 2.6%, to $83.52 a barrel on the New York Mercantile Exchange ahead of the contract’s expiration at the end of the session. November WTI
    CL00,
    -1.75%

    CLX22,
    -1.75%
    ,
    the most actively traded contract, was down $2.30, or 2.7%, at $83.06 a barrel.

  • November Brent crude
    BRN00,
    -1.68%

    BRNX22,
    -1.68%
    ,
    the global benchmark, declined by $2.13, or 2.3%, to $89.87 a barrel on ICE Futures Europe, with front-month contract prices poised to settled below $90 for the first time since Sept. 8, FactSet data show.

  • Back on Nymex, October gasoline
    RBV22,
    -0.99%

    fell 1.2% to$2.4355 a gallon, while October heating oil
    HOV22,
    +1.14%

    was down 0.5% at $3.294 a gallon.

    Get Breaking Stock Alerts

    Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
    Email address
    We are Spam free & Secure 🙂
  • October natural gas
    NGV22,
    -0.03%

    traded at $7.674 per million British thermal units, down 1%.

Market drivers

Analysts said oil traders, like participants in other markets, are paying close attention to the Fed, which is expected to deliver a rate increase of at least 75 basis points, or 0.75 percentage point, when it concludes its two-day meeting Wednesday. Fed-funds futures market have priced in an outside chance of a 100 basis point increase.

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

Read: Fed to put a ‘firm foot on the brake pedal’ this week

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

“However, a hawkish Fed this week could further stoke fears of a hard landing and spur a continued rally in the dollar, which would surely see the recent lows near $80/barrel tested into the weekend,” they said.

And if “we see the dollar rally to new highs while the outlook for the global economy dims, expect pressure across the space as fears that global central banks will become overly restrictive with policy,” the Sevens Report analysts said. “Sending the global economy into recession will be negative for everything from industrially sensitive commodities from energy and industrial metals, to precious metals and grains.”

On the other hand, a “less-hawkish pivot could help spark another relief rally across commodities,” they said.

Meanwhile, falling refinery margins were seen as a drag on crude, said Warren Patterson, head of commodities strategy at ING, in a note. “Margins have come under pressure,” he said, noting reports that China could boost export quotas for refined products.

“The refined product market, particularly middle distillates, has faced significant tightness for much of the year, and so increased Chinese supply would be welcomed by many in the market,” he wrote.

In related news, The U.S. Department of Energy on Monday issued a notice of sale of up to 10 million barrels of crude oil from the nation’s Strategic petroleum Reserve in November. That was part of President Joe Biden’s March 31 announcement that authorized the sale of oil from the SPR to help address supply disruptions from the Russia-Ukraine war.

Written By

Click to comment

Leave a Reply

Your email address will not be published.

Related Articles

Breaking

A Washington state rancher has been sentenced to 11 years in prison for a nearly quarter-billion-dollar ripoff of Tyson Foods Inc. TSN, -1.94% in...

Breaking

The Federal Reserve has been showing no signs of letting up on aggressive rate hikes, even as its policies fuel carnage for the ages...

Breaking

Elon Musk’s satellite internet company, Starlink, will help provide broadband internet access to people in Florida affected by Hurricane Ian. Florida governor Ron DeSantis,...

Breaking

With multiple cracks emerging in global financial markets, the Federal Reserve may be forced to end its aggressive rate hikes “when something breaks” and...

Get Breaking Stock Alerts

Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
Email address
We are Spam free & Secure :)

Get Breaking Stock Alerts

Email address

Get Breaking Stock Alerts

Stay informed of the biggest news on stocks so you can react before 90% of retail investors.
Email address