Energy Prices Fall on Prospects of Rate Hikes
March 10, 2023
Energy prices fell again in yesterday’s trading pressured by concerns due to the US Federal Reserve Chair testimony this week about needing to raise interest rates higher and most likely faster stating a 0.50% rise may be needed this month versus a 0.25% rise previously. Next week the CPI and the PPI reports will help drive the Fed’s decision on how much to raise rates.
The negative outlook for the economy and higher rates continue to put pressure on energy markets. Many traders thought that demand would be enough to keep inventories tight and support prices, but the tone has turned a bit more negative on the outlook with higher rates, a higher US Dollar, and inventory builds.
The Financial Times reported that the US has privately urged some commodity traders to help move price-capped Russian oil in a bid to keep supplies stable. It reported that Treasury officials met executives and traders at Trafigura and Gunvor among others and offered reassurance over expanding their role in Russian crude and fuels trade without breaching western restrictions.
The energy markets will see how the February payrolls numbers come out this morning to help it seek some direction as these markets are filled with a ton of uncertainty.
The JOLTS report came in down 410,000 to 10.824 million job openings. That is 1.9 jobs for every person looking for a job, or a 5.13 million person gap.