Outlook for Interest Rate Cut Creates Bullish Optimism
July 30th, 2019
The Fed is meeting this week and traders are expecting them to cut interest rates and despite the fact that this is the outlook for the market it will be a bullish factor for energy. Crude is trading higher this morning as the outlook for a Fed rate cut increases. The meeting starts today and the Fed will make their announcement tomorrow.
The products were weak in relationship to crude oil in yesterday’s trading, crude did have a positive day. Some market watchers were attributing the support to prices the result of the market looking for another big decline in crude oils stocks again this week. Also supportive to crude prices is the expected rate cut.
The market seems positive that the US and China are back having talks but President Trump set some very low expectations as he said he believed that China would wait until after the election to work on a trade deal with the US.
The US has said that they plan to play a significant part in keeping the waterways open that serve the Persian Gulf.
The CEO of Green Plains, Todd Becker, said the US ethanol industry is about to break under the weight of the Trump Administration’s trade war with China and the increase in the number of small refineries exempted from the country’s biofuel laws. The US ethanol industry was preparing for growth in recent years, but the momentum has stalled in the face of President Trumps’ trade war with China and his administration’s decision to align itself with the oil industry on demand-cutting waivers for biofuels. The sustained downturn in margins will finally begin taking its toll as some producers run out of money and begin a host of austerity measure to weather the storm. He said some plants will cut production, some will shut down and some will permanently shut down.
Iran’s Foreign Ministry spokesman, Abbas Mousavi, said talks between Iran and the United States would be possible if based on an agenda that could lead to tangible results. However, he added that Washington is not seeking dialogue.