Fed Likely to Pause Rate Increases
September 20, 2023
The weekly API estimates called crude oil inventories down 5.25 million barrels, gasoline inventories up 730,000 barrels, and distillates up 258,000 barrels.
The estimates for today’s DOE inventory report are crude down 482,000 barrels, gasoline up 361,000 and distillates down 7,000 barrels.
Crude oil closed just a bit lower on the day after rallying to a 10-month high. The selloff seems to be profit taking after an impressive run up to a 10-month high and the market being technically overbought. Energy prices have seen a strong run up over the last month on the back of the Saudi and Russian production cuts and declining inventories.
US housing starts for August 2023 came in a little weak. These showed that there were 1.283 million annualized starts. This is down 11.3% on the month. The market was looking for 1.43 and the previous was 1.45. That is the lowest since June 2020. Housing permits were up 6.9% at 1.543 and the market was looking for 1.45 and the previous was 1.44.
According to Reuters calculations, Russia’s oil and gas revenues, which account for around a third of the total federal budget proceeds, are set to increase to around 733 billion rubles or $7.6 billion in September, up 14% from the previous month. The corresponding figure in September 2022 was 688 billion rubles. The rise reflects a 24% month-on-month increase to 1.1 trillion rubles in proceeds from a mineral extraction tax.
Bloomberg reports that the Fed will likely pause rate increases for a second time this year and keep borrowing costs in a range of 5.25% to 5.5%, in a policy decision due today at 2 PM.