{"id":34802,"date":"2023-07-12T18:34:31","date_gmt":"2023-07-12T22:34:31","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/commodities\/oil-up-ignoring-dismal-stockpiles-data-to-focus-on-less-aggressive-fed\/"},"modified":"2023-07-12T18:34:32","modified_gmt":"2023-07-12T22:34:32","slug":"oil-up-ignoring-dismal-stockpiles-data-to-focus-on-less-aggressive-fed","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=34802","title":{"rendered":"Oil up, ignoring dismal stockpiles data to focus on less-aggressive Fed"},"content":{"rendered":"
\n

Investing.com — It\u2019s one thing to run ahead of the pack. It\u2019s another to do so with blinkers on, as oil bulls demonstrated Wednesday, charging into higher territory by ignoring bearish U.S. inventory data and a Fed official\u2019s caution that cooling inflation did not mean the central bank was ready to stop rate hikes.<\/p>\n

New York-based West Texas Intermediate, or , crude settled up 92 cents, or 1.2%, at $75.75 per barrel. WTI earlier hit $76.08, its highest since April. The U.S. crude benchmark is up 2.6% on the week, extending last week\u2019s 4.6% rally.<\/p>\n

London-based gained 71 cents, or 0.9%, to finish the New York session at $80.11, after a near three-month high of $80.49. For the week, Brent is up 2% after last week\u2019s 4.8% rally.<\/p>\n

Oil\u2019s latest run-up came after the Labor Department reported that the U.S. grew by just 3.0% in the year to June, expanding at its slowest pace in more than two years. Annual CPI was at 4.0% in May.<\/p>\n

Even so, , measured by excluding volatile food and energy prices, rose 0.2% and was still up 4.8% from a year ago \u2014 more than double the Fed\u2019s 2% target. That was an indication that while price pressures had eased in general, consumers were probably paying more than they should for everything, from what they stock in their refrigerator to what they put in the tank of their cars.<\/p>\n

\u201cInflation is still too high,\u201d Tom Barkin, Fed president for the region of Richmond, said at an event that began just after the release of the CPI data. \u201cThe demand seems to be settling down, but [the Fed] still looking to be convinced that will feed through to inflation. Demand remains elevated at the same time supply is constrained, the process of getting back to balance has been slow.\u201d<\/p>\n

Fed\u2019s Barkin says not time yet to stop rate hikes\u00a0<\/h2>\n

Barkin also indicated that the Fed, which paused rate hikes in June to study its impact, will resume monetary tightening to get inflation back to its target. The central bank\u2019s policy-makers will make their next decision on rates on July 26. Investing.com\u2019s assigned a 94% probability of the central bank doing a 0.25% hike at its July policy meeting.\u00a0<\/p>\n

The Fed\u2019s tolerance for inflation is, meanwhile, just 2% per annum. In response to the runaway price growth caused by relief spending related to the coronavirus pandemic, the central bank has raised interest rates 10 times in March 2022, adding 5% to rates from a previous 0.25%.\u00a0<\/p>\n

\u201cWe are comfortable doing more with policy if incoming data does not confirm inflation will return to target,\u201d Barkin said on Wednesday. \u201cBacking off too soon would require the Fed to do even more [later]. It is still a question whether inflation can settle while the labor market remains as strong as it is.\u201d\u00a0<\/p>\n

Aside from Barkin\u2019s commitment to staying the course on rate hikes, oil longs also ignored something as or more pertinent \u2014 U.S. inventory data.<\/p>\n

U.S. inventories jumped by their most in four weeks as early summer demand for motor fuels appears to have peaked after weeks of heavy processing by refiners trying to ensure adequate supply to market, the Energy Information Administration, or EIA, reported.<\/p>\n

Stocks of gasoline were flat from a week earlier and those of distillates surged their most in five weeks, the EIA said in its Weekly Petroleum Status Report.<\/p>\n

The U.S. jumped by 5.946 million barrels during the week ended July 7, versus the 1.508M barrel draw during the prior week to June 30. Industry analysts tracked by Investing.com had forecast a build of only 0.483M for last week.<\/p>\n

The crude draw reported by the EIA also came with its usual caveat \u2014 a\u00a0 release of crude from the U.S. Strategic Petroleum Reserve. But even that this time was marginal, amounting to just 0.4M barrels. If that was subtracted, the overall crude build would still be 5.5M or so.\u00a0<\/p>\n

Even exports — one of the brightest spots of the U.S. oil market — were weak, with crude shipments down\u00a01.757M barrels daily to 2.144M. Just a few weeks ago, crude exports were near the March all-time high of 4.5M barrels per day.<\/p>\n

On the fuels side, were unchanged from the week earlier, the EIA said. Analysts had expected the agency to cite a draw of around 730,000 barrels instead, to add to the prior week\u2019s pull of 2.55 million barrels. Automotive fuel gasoline is the No. 1 US fuel product.<\/p>\n

\u201cHorrible, horrible demand numbers for gasoline\u201d<\/h2>\n

Worse, in terms of products supplied to the market \u2014 an indicator of demand at the pump, there was a drop of 0.844 million barrels daily to 8.756M per day and against last week\u2019s 9.599M. That 8.756M was one of the lowest for an early summer season.<\/p>\n

\u201cThese are horrible, horrible demand numbers for gasoline,\u201d said John Kilduff, partner at New York energy hedge fund Again Capital. \u201cIf the uptake doesn\u2019t pick up, prices will probably be stuck again like before, this time at mid-$70 levels instead of the previous low or sub-$70s.\u201d\u00a0<\/p>\n

In the case of , the EIA reported a build of 4.815M barrels. Analysts had forecast a draw of 0.262M barrels last week, against a previous drop of 1.045M. Distillates are refined into , diesel for trucks, buses, trains and ships, and fuel for jets.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Investing.com — It\u2019s one thing to run ahead of the pack. It\u2019s another to do so with blinkers on, as oil bulls demonstrated Wednesday, charging into higher territory by ignoring bearish U.S. inventory data and a Fed official\u2019s caution that cooling inflation did not mean the central bank was ready to stop rate hikes. New […]<\/p>\n","protected":false},"author":1,"featured_media":2233,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[242],"tags":[83],"class_list":["post-34802","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-commodities","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nOil up, ignoring dismal stockpiles data to focus on less-aggressive Fed | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Investing.com -- It\u2019s one thing to run ahead of the pack. 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