The decisions of the Fed’s decisions were frightened in the oil market, but not for a long time
on Wednesday, oil prices fell against the backdrop of a sharp increase in the key rate of the US Federal Reserve. The risks of slowing the global economy force market participants more restrained to look at the prospects for demand for fuel. At the same time, weekly statistics from EIA shows that the current level of consumption remains strong.
Brent futures were in the middle of the trade range $ 115-124. The graph is clearly seen that repeated attempts to rise above $ 124 failed. Quotes are adjusted, and this movement can Continue up to $ 115 per barrel, if the information background remains negative. Meanwhile, there are no reasons for a deeper decline yet. The supply deficit is preserved in many regions of the world.
FRS increases the key rate of
US Federal Reserve on Wednesday, increased the key rate by 75 BP at once, demonstrating the intention to fight inflation, which has reached the record 8.6%over the past 40 years. This step means reducing dollar liquidity and strengthening the American currency. US dollar index dxy in advance He played this event and at yesterday’s session was adjusted after a symbolic renewal of maximums.
In addition to a strong dollar, the growth of the rate can negatively affect forecasts for the world economy. Both of these factors are negative for oil demand, which is closely related to economic activity. The news was the main reason for oil sales against the backdrop of local bite, formed as a result of several unsuccessful attempts to overcome $ 124 per barrel of Brent through futures.
The negative impact on prices can have a short -term effect, since the solution of the Fed can not be called unexpected. For the most part, it has already been taken into account in quotes. At a longer distance, the monetary policy of the largest financial regulator of the world will remain in focus.
Forecasts of the IEA
on Wednesday of the IEA published the next monthly report on the oil market. The prognosis for the growth of oil demand amounted to 1.8 million used in 2022 and 2.2 million used in 2023. Almost 80% of the increase in demand in 2023 will be in countries that are not included In the OECR.
production growth in countries not included in OPEC+ will be 1.9 million used in 2022 and 1.8 million b/s in 2023. Premium in OPEC+ countries in 2022 can grow by 2 , 6 million b/s in the event that production in Libya is recovered after a fall by 1.1 million b/s in recent weeks. In 2023, the production of the alliance may be reduced mainly due to the decrease in Russia and individual countries outside the Persian Gulf. The agency notes that in 2023 the proposal can keep up with demand with great difficulty.
World oil reserves in April Grounded by 77 million barrels. Industrial reserves in the OECD countries increased by 42.5 million barrels, mainly due to the production of oil from reserves. Despite this, industrial stocks of 2.7 billion barrels. They remained for 290 million barrels. Below the average level over the previous 5 years. Preliminary data for May show that the total OECR reserves could grow into symbolic 6 million barrels.
Statistics from EIA in the USA
data from EIA on Wednesday showed an increase in oil supplies by almost 2 million barrels. Against the background of a reduction in backup reserves (SPR) almost 7 million barrels. The production increased by 0.1 million used to 12 million b/s, pure imports decreased by 0.7 million b/s.
gasoline stocks continue to decline. Last week, their reduction amounted to 0.7 million barrels. The discrepancy between the current level and the average over 3 years is growing rapidly. The total fuel supply, an indirect demand indicator, decreased by 0.5 million used to 19.7 million b/s.
This morning, Brent futures are growing by 0.85% trading at the previous day in the region of $ 119.5 per barrel.
