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February 9, 2022 – Page 31 – rdspinvestments

February 9, 2022

Oil: Despite Big U.S. Draw, Iran Stays on Traders’ Minds 

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Commodities11 hours ago (Feb 09, 2022 03:13PM ET)

Oil: Despite Big U.S. Draw, Iran Stays on Traders’ Minds © Reuters.

By Barani Krishnan

Investing.com – The U.S. government reported the biggest weekly draw of crude oil in more than 3 years, and the market’s reaction: “Meh.”

In one of the biggest positive surprises for oil bulls in months, the Energy Information Administration reported on Wednesday that crude kept in storage across the United States fell by 4.76 million barrels during the week ended Feb. 4, the most for a week since October 2018.

The drawdown was triple that projected by industry analysts and marked the second straight weekly drop in crude stocks.

That’s not at all. Gasoline stocks also had a surprise draw while those of distillates again fell more than expected.

Crude prices jumped more than $1 a barrel within a minute of the data, then retreated almost as spectacularly before settling less than one percent higher.

The market slid as much as 3% over two previous sessions, after rising about 30% in seven prior weeks.

While the mood among those long crude wasn’t necessarily gloomy, it wasn’t exuberant either — certainly not in the vein of last week where no sentiment was spared to push prices to beyond $90 a barrel.

The reason seemed clear and one that bulls in the market appeared loathe to discuss: the resumption of the Iran-West nuclear talks that has raised the specter of U.S. sanctions being removed from Tehran oil exports. It’s an eventuality that could add hundreds of thousands of barrels per day onto a market which for 18 months has been tightly controlled by the OPEC+ alliance.

To be sure, Iran is part of OPEC+. But it has been shut off from the legitimate market for exporting its oil since 2018, allowing the rest of the 26-member alliance controlled by Saudi Arabia — with Russia’s assistance — to squeeze consuming countries to pay more for the crude they need. And pay those countries have, as a barrel went from the pandemic low of negative $40 per barrel for U.S. crude to seven-year highs of $93.17 on Friday.

Iran is capable of putting anywhere between one and two million barrels per day on the market and is believed to be getting less than half of that out with black market sales that evade the U.S. sanctions.

“It’s clear why oil is unable to rally today despite this humongous drawdown in U.S. crude,” said John Kilduff, partner at Again Capital, a New York-based energy hedge fund. “The answer is Iran and talk of some Venezuelan oil likely coming back to the market as well.”

Venezuela is another country under U.S. sanctions. The Biden administration is considering a Chevron Corp (NYSE:) proposal that it be allowed to accept and trade Venezuelan oil cargoes to recoup unpaid debt, people close to the discussions told Reuters this week.

New York-traded settled up 30 cents, or 0.3%, at  $89.66 per barrel. WTI lost some 2.7% in two previous sessions.                                                                                                      

London-traded , the global benchmark for oil, settled up 77 cents, or 0.9%, at $91.55 per barrel. Brent lost 2% between Friday’s settlement and Tuesday’s.

Notwithstanding the Iran-Venezuela situation, the EIA data put a solid demand picture under the market that had been missing from the oil rally of late.

Questions about the demand for oil had cropped up in recent weeks as EIA data showed little reductions in crude stocks and a jump instead in gasoline inventories — despite a plunge in Covid cases and hospital admissions nationwide that would have typically led to more mobility and economic activity.

“Finally, there is some correlation here between the EIA numbers and the dropping US COVID case counts,” Kilduff said, referring to the EIA data.

Gasoline inventories fell last week, drawing down by 1.64 million barrels versus projections for a 1.5-million barrel drop. Gasoline barrels had ballooned by nearly 40 million barrels during the 10 weeks to January 28. 

Gasoline, known as petrol outside of the United States, is America’s premier fuel product. Inventories piled up over the past month-and-a-half as refiners appeared to be maximizing fuel processing ahead of scheduled plant maintenance in March. Escalating winter temperatures in January also typically lead to less driving among Americans.

Stockpiles of distillates, which include diesel and , fell by 929,000 barrels last week against expectations for a draw of 1.5 million and the previous week’s drop of 2.4 million, the EIA report showed. Distillates are refined into diesel for trucks, buses, trains and ships as well as fuel for jets.

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Gold Down, but in Tight Range Ahead of U.S. Inflation Data

Gold Down, but in Tight Range Ahead of U.S. Inflation Data By Investing.com – Feb 09, 2022

By Gina Lee Investing.com – Gold was down on Thursday morning in Asia, remaining within a tight range. Investors now await the latest U.S. inflation data, which could offer further…

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

S&P 500 Advances as Meta, Chip Stocks Lead Tech Gains Ahead of Inflation Update

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Stock MarketsFeb 09, 2022 04:07PM ET

S&P 500 Advances as Meta, Chip Stocks Lead Tech Gains Ahead of Inflation Update© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 closed Wednesday, as a rally in Facebook-parent Meta helped the broader tech sector build on recent gains just as Treasury yields paused their run higher ahead of a red-hot inflation report due Thursday. 

The rose 1.5%, the added 0.8%, or 306 points, the jumped 2.1%.

Meta Platforms (NASDAQ:) jumped more than 5% as investors appeared to the buy the dip in the social media company, which hit fresh 52-week lows a day earlier.

For the second-straight day, a rally in semiconductor stocks also pushed tech higher, with Nvidia (NASDAQ:) racking up a 5% gain as analysts downplayed the $1.25 billion hit to the company after its deal to acquire UK chipmaker ARM fell through.

“The $1.25bn prepay represents ~30 days of NVDA free cash flow – and we see no impact to the core business and trends – and we would not be surprised to see an accelerated timeline for NVDA’s ARM CPU called Grace which was originally scheduled for sampling in CY22 and shipments in CY23,” Credit Suisse said in a note as it kept its outperforming and $400 price target on the stock.  

A retreat in U.S. bond yields also supported sentiment on growth sectors of the market like tech. The U.S. 10-year yield took a breather from attempting to top 2% for the first time in more than two years, but it is expected to breech that milestone this year.

“The TNX’s () recent rally above the 1.80% zone sets up a bullish signal to test the potential target range of 2.00-2.20% in 2022,” Janney Montgomery Scott said in a note.

U.S. government bond yields, which have been buoyed by expectations for more aggressive action, will remain in the spotlight as data due Thursday is expected to show inflation remains elevated. 

On the quarterly earnings front, investors continued to digest mostly bullish results

Chipotle (NYSE:) reported better-than-expected results after the burrito chain move to hike menu prices offset the impact of inflation, sending its shares more than 10% higher.

Yum! Brands (NYSE:) reported fourth quarter earnings that fell short of estimates,  as higher costs weighed on margins at Taco Bell, KFC and Pizza Hut. Its shares was up 2%.

LYFT (NASDAQ:) rose more nearly 7% after reporting a beat on both the top and bottom lines, though a miss on active riders first-quarter guided  that fell short of estimates kept a lid on gains. 

Crypto-related stocks, meanwhile, including Coinbase (NASDAQ:), Riot Blockchain (NASDAQ:), and Marathon Digital (NASDAQ:), and as bitcoin remain on the comeback trail, up more than 3%.

In other news, Roblox (NYSE:) jumped 9% after teaming up with the National Football League to launch ‘NFL Tycoon’ to engage football fans in the metaverse. 

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Big CPI Report and Ongoing Earnings – 3 Things To Watch For Thursday

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Economy9 hours ago (Feb 09, 2022 05:03PM ET)

Big CPI Report and Ongoing Earnings - 3 Things To Watch For Thursday

By Daniel Shvartsman

Investing.com – Correction? What correction? Markets appear to have found their bullish groove again, with Wednesday’s trading seeing the Nasdaq in U.S. markets, climbing more than 2%. The tech-driven index is now more than 8% above its late January bottom, even as the approaches 2% itself.

There’s been one persistent threat to markets though, and that threat takes center stage on Thursday. Beyond the headline inflation report due out tomorrow morning, a full slate of earnings will offer plenty of individual company and sector catalysts.

Here’s what to watch in Thursday’s market.

1. CPI Report

The and report will come out pre-market and is expected to place pressure on the Fed, policymakers, and the market. Economists expect and to come in at 0.5% month over month; Core CPI (excluding energy and food prices) is expected to be 5.9% year over year, and CPI is expected to be 7.3% year over year. The latter would be the highest number since 1982.

Of course, expectations have a way of getting priced in; both rising yields and rate hike expectations suggest that the market anticipates a big number and subsequent Fed action in March. Perhaps the biggest question is whether this CPI number will be enough to nudge the Fed towards a 50 basis points hike when they next meet. And if so, can tech stocks and long duration assets hold up in the short term?

2. Coca Cola and Pepsi earnings

The two beverage giants report earnings before the bell. In what has been a more defensive market climate, the two staples have outperformed indices year to date. PepsiCo Inc (NASDAQ:) is to show 7.8% revenue growth and 3.4% earnings growth, while Coca-Cola Co (NYSE:) is to post 4.5% revenue growth and a 12.7% drop in earnings per share. Beyond the specific numbers, the two rivals should be able to provide insights on commodity price inflation and what pricing looks like for consumers.

3. Cloudflare and Affirm earnings

Several tech companies report tomorrow, and none have had flashier ups and downs than Cloudflare (NYSE:) and Affirm Holdings (NASDAQ:). Cloudflare, a cloud platform and services provider, is to post 47% revenue growth and come just shy of break-even on the earnings front. Affirm is to post 61% revenue growth while still showing losses on the net income front. The buy-now/pay-later fintech company is nearly 60% off of its highs set just last November, and whether enough of a slowdown has been priced in or whether they can change the market’s mind on their own with their performance is to be seen.

The same goes for Cloudflare, which is down only 48% from its 52-week highs from November; today’s Twilio (NYSE:) is a sign of how the market can get offsides even as the broader narrative has shifted. Will these companies benefit from the same lowered expectations?

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Walt Disney Results Beat in Q1 as Streaming, Parks Divisions Drive Growth

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Stock Markets6 hours ago (Feb 09, 2022 05:08PM ET)

Walt Disney Results Beat in Q1 as Streaming, Parks Divisions Drive Growth© Reuters. Walt Disney Earnings, Revenue Beat in Q1

By Yasin Ebrahim

Investing.com – Walt Disney (NYSE:) reported Wednesday fiscal first quarter that beat analysts’ forecasts as its parks division more than doubled revenue and its streaming business added more subscribers than expected.

Walt Disney shares gained 8.8% in after-hours trade following the report.

Walt Disney announced earnings per share of $1.06 on revenue of $21.82B. Analysts polled by Investing.com anticipated EPS of $0.7319 on revenue of $20.27B.

Disney’s parks, experiences and products reported revenue that more than doubled to $7.23 billion from the same period last year. That offset a decrease in its consumer products business, which was weighed down by the closure of a number of Disney-branded retail stores in North America and Europe in the second half of fiscal year 2021.

Disney+, its streaming business, reported new subscriber adds of 129.8 million, up from 94.9 million a year earlier, and beating expectations for 125.75 million.

Average monthly revenue per subscriber in its domestic market increasing to to $6.68 from $5.80, while international subscribers, which excluded Disney+ and Hostar, rose to $5.96 from $4.73, underpinned by a rise in retail prices.

Stay up-to-date on all of the upcoming earnings reports by visiting Investing.com’s earnings calendar

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

U.S. inflation data hits global stocks, lifts benchmark yields

2/2

U.S. inflation data hits global stocks, lifts benchmark yields© Reuters. FILE PHOTO: Visitors look at a stock quotation board at Tokyo Stock Exchange in Tokyo Japan, October 11, 2018. REUTERS/Issei Kato

2/2

By Chris Prentice and Tommy Wilkes

WASHINGTON/LONDON (Reuters) – Major global stock indexes fell on Thursday under pressure from crucial U.S. inflation data, falling technology shares and rising benchmark bond yields.

U.S. consumer prices rose solidly in January, leading to the biggest annual increase in inflation in 40 years, which could fuel financial market speculation for a 50 basis points interest rate hike from the Federal Reserve next month.

Wall Street retreated. The fell 1.47% to end at 35,241.59 points, while the lost 1.81% to 4,504.06. The dropped 2.1% to 14,185.64. It was the seventh time in 2022 that the Nasdaq lost more than 2% in a session.

The S&P 500 is now down about 5% in 2022, and the Nasdaq is down about 9%.

Tech stocks, which boosted U.S. shares to steep gains earlier in the week, fell 2.75%.

The MSCI world equity index fell after clinging to gains throughout much of the session.

The pan-European index closed down 0.2% as rising bond yields. The heavyweight technology sector fell more than 1%, with losses in France’s Atos a drag.

Meanwhile, the rose 0.38% and the German edged up 0.05%.

“While inflation continued to overshoot the Fed’s target in January, fundamental drivers of inflation are starting to improve,” said Bill Adams, chief economist for Comerica (NYSE:) Bank. “Remember, a big part of the surge in prices was from shortages, and the economy is making big strides to reduce shortages.”

A pullback in government bond yields in recent days and a tech-fueled rebound had supported the broader stock market rally this week. But most markets remain down sharply for the year – the tech-dominated by 8% – after a January in which investors panicked about the impact of higher rates and less cheap money on highly valued shares.

The Fed is broadly expected to begin raising rates at its March meeting.

Federal funds rate futures have increased the chances of a half percentage-point tightening by the Federal Reserve at next month’s meeting following the U.S. consumer prices report.

In Asia, Chinese blue chips lost 0.26% as investors took profits and worries about U.S. sanctions continued to weigh on sentiment.

Japan’s blue-chip closed 0.42% higher.

Long-term bond yields had been continuing Wednesday’s retreat when U.S. inflation data sent them whipsawing. The yield on the benchmark 10-year U.S. Treasury note topped 2% for the first time since August 2019. [US/]

Germany’s benchmark 10-year yield soared to its highest since December 2018. [GVD/EUR]

Bond yields have been climbing as investors anticipate the Fed will begin to tighten monetary policy as well as expectations the U.S. central bank will begin to wind down its balance sheet.

Money markets are expecting a first rate hike by the European Central Bank as soon as June after ECB President Christine Lagarde signaled last week for the first time that a rate hike in 2022 could be a possibility to curb inflation.

In a reminder that many central banks remain concerned about rising rates, the Bank of Japan announced that it would buy an unlimited amount of 10-year government bonds at 0.25%..

The 10-year government bond yield hit 0.23% on Thursday, the highest since 2016 and close to the implicit 0.25% cap the BOJ set around its target of 0%, before easing back.

The yen rose 0.51% against the dollar by 4:27 p.m. EST.

Sweden’s central bank kept its policy broadly unchanged, saying it was too early to withdraw support for the economy and that surging inflation was temporary.

Graphic: Sweden crown- https://fingfx.thomsonreuters.com/gfx/mkt/jnvwelrewvw/Sweden.JPG

The dollar whipsawed in choppy trade, and the euro retreated 0.14% .[FRX/]

Gold prices touched their highest level in two weeks, with a boost from earlier losses in the dollar, before retreating. Spot prices or -0.37 percent, to $1,825.69 an ounce. U.S. settled mostly unchanged at $1,837.40. [GOL/]

Elsewhere in commodities, futures settled down 0.2% at $91.41 a barrel after rising more than 1%. , which rose more than $2 earlier in the day, settled up 0.3% at $89.88 a barrel.

Analysis-After oil, gas and coal, global fuel shortage spreads to diesel

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Commodities3 hours ago (Feb 09, 2022 10:01PM ET)

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Analysis-After oil, gas and coal, global fuel shortage spreads to diesel© Reuters. FILE PHOTO: A diesel fuel nozzle with new European labels to standardise gasoline pumps in the EU zone is seen at a petrol station in Nice, France, October 12, 2018. REUTERS/Eric Gaillard/File Photo

2/2

By Rowena Edwards

LONDON (Reuters) – Global supplies of diesel are dwindling as refiners struggle to keep pace with rapid post-pandemic demand recovery, exacerbating an acute global energy shortage which has already sent the prices of gas, coal and soaring.

At a time when global central banks are fretting over inflation rates not seen for decades, diesel shortages would push up fuel and transportation costs further and add more upward pressure on retail prices.

The U.S. and Asian diesel imports on which Europe relies have been limited in recent weeks due to higher domestic consumption for manufacturing and road fuel purposes.

Gasoil inventories, which include diesel and , held in independent storage in Europe’s Amsterdam-Rotterdam-Antwerp (ARA) refining and storage area fell last week by 2.5%, data from Dutch consultancy Insights Global showed.

Regional stocks were at their lowest level for this time of year since 2008, according to the data, while Singapore’s onshore inventories of middle distillates also sank to multi-year lows of 8.21 million barrels.

“Diesel demand seems to be improving in (northwest Europe) but lower refining capacity compared with pre-COVID and low import levels are keeping the market under severe pressure,” said Insights Global’s Lars van Wageningen.

Northwest European diesel cargo prices reached $114/bbl on Monday, the highest since September 2014, while margins to crude reached two-year highs last week.

Morgan Stanley (NYSE:) analysts note that diesel prices reached around $180 a barrel in 2008, driven by an “exceedingly tight” middle distillate market as rose close to $150/bbl.

“A repeat of that is not our base case, but it is notable that diesel prices have been tracking the 2007-08 period closely in recent months,” they said, adding that they expected crude prices to reach $100/bbl in the second half of this year.

Last week, a winter storm tested fuel availability in the U.S. with some utilities preparing to use more distillate fuel oil to meet demand, while South Korea and India have been unable to fill a supply gap left by China’s recent clampdown on refined product exports due to their own domestic needs.

Tight supply has pushed Asian diesel prices for the benchmark 10ppm gasoil to their highest since Sept. 2014.

Graphic: European diesel refining margins – https://graphics.reuters.com/EUROPEAN-DIESEL/gdpzynjmkvw/chart.png

Refiners generally respond to high margins and low inventories by ramping up output. But the global oil refining complex is under strain, with capacity falling for the first time in 30 years last year as closures outweighed new additions, the International Energy Agency said last month.

Increasing diesel output would also require faster than normal crude processing rates at refineries, with downstream equipment configured to maximise middle distillate yields at the expense of light ones.

Instead, a number of refineries – particularly in the U.S. – are still running plants at rates below the five-year average to avoid producing too much jet fuel, where demand still lags 2019 levels, leaving companies struggling to identify a clear way to restock diesel inventories in the short term.

“Given the pressure from investors to reduce investments in fossil fuels and talk of peak oil demand, this backdrop likely reduces the incentive to invest in new refining capacity,” UBS analyst Giovanni Staunovo said.

“With fuel demand likely to increase in the next 10–15 years, and supply unable to keep pace, I would expect more (fuel price) volatility in the future,” he added.

LEANING BACKWARDS

Tightening European supplies pushed the region’s six-month diesel spread to more than $100 a tonne on Monday, its widest backwardation on record.

Backwardation means that prompt prices are higher than future contract prices, reflecting near-term demand that encourages traders to release oil from storage to sell it.

Graphic: European diesel backwardation blows out – https://graphics.reuters.com/EUROPEAN-DIESEL/klvykmjnwvg/chart.png

Nonetheless, preliminary diesel and gasoil flows into Europe from east of Suez, Russia, the Baltics and the U.S. this month are currently at 1.66 million tonnes, revised down from previous expectations of 1.83 million tonnes, according to Refinitiv data, and compared to 4.6 million tonnes in January.

“We have seen minimal diesel exporting from the U.S. Gulf Coast, and zero storage plays on clean vessels,” said one U.S. clean tanker broker.

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Gold Down, but in Tight Range Ahead of U.S. Inflation Data

Gold Down, but in Tight Range Ahead of U.S. Inflation Data By Investing.com – Feb 09, 2022

By Gina Lee Investing.com – Gold was down on Thursday morning in Asia, remaining within a tight range. Investors now await the latest U.S. inflation data, which could offer further…

Oil little changed as investors eye U.S.-Iran talks

Oil little changed as investors eye U.S.-Iran talks By Reuters – Feb 09, 2022

By Florence Tan SINGAPORE (Reuters) -Oil prices edged down on Thursday, after rallying on an unexpected drop in U.S. crude inventories in the previous session, as investors await…

Oil Mixed, but Boosted by Bigger-Than-Expected Draw in U.S. Crude Supply

Oil Mixed, but Boosted by Bigger-Than-Expected Draw in U.S. Crude Supply By Investing.com – Feb 09, 2022

By Gina Lee Investing.com – Oil was mixed on Thursday morning in Asia, with an unexpected drop in U.S. crude inventories giving the black liquid a boost during the previous…

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Oil steady amid prospects of aggressive Fed rate hike

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Please try another search

Commodities16 hours ago (Feb 10, 2022 03:16PM ET)

Oil steady amid prospects of aggressive Fed rate hike© Reuters. FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, appearing to run out of space to contain a historic supply glut that has hammered prices, in Cushing, Oklahoma, March 24, 2016. REUTERS/Nick Oxford

By Arathy Somasekhar

(Reuters) -Oil prices were steady on Thursday as markets weighed the possibility of an aggressive and unforecast rate hike for a steeper rise in energy demand. After rising more than 1% in early trade, futures settled down 14 cents, or 0.2%, at $91.41 a barrel. U.S. Texas Intermediate crude, which rose more than $2 earlier in the day, settled up 22 cents, or 0.3% to $89.88 a barrel.

After U.S. inflation data came in on Thursday at its hottest in 40 years, St. Louis Federal Reserve Bank President James Bullard said he wanted a full percentage point of interest rate hikes by July 1.

Interest rates futures showed a 60% chance of a 50-basis-point hike in March after Bullard’s comments, and U.S. stock markets fell.

The dollar gave up some of its earlier losses. A stronger greenback makes oil and other commodities more expensive for those holding other currencies.

“Prices are confused between what appears to be strong inventory statistics and signs that the Fed is going to raise rates quicker than expected in 2022,” said Scott Shelton, energy specialist at United ICAP (LON:).

On Wednesday, oil prices rallied after data showed crude inventories fell unexpectedly last week to their lowest since October 2018, while fuel demand hit a record high.

After the data, oil prices reversed a slide spurred by the resumption of indirect U.S.-Iran nuclear talks a day earlier. A deal could lift U.S. sanctions on Iranian oil and ease global supply tightness.

Earlier this week, crude benchmarks hit seven-year highs on political concerns, and as a robust demand recovery from the coronavirus pandemic has kept inventories at fuel hubs globally at multi-year lows.

On Thursday, the Organization of Petroleum Exporting Countries said world oil demand might rise even more steeply this year as the global economy posts a strong recovery.

The report also showed OPEC undershot a pledged oil output rise in January under its pact with allies to gradually unwind record output cuts put in place in 2020.

Overall, thin supplies of , low storage and global output that is nearing a maximum are driving up prices, according to Mitsubishi UFJ Financial Group (NYSE:).

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Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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