San Francisco Fed President Suggests Two More Rate Hikes May Be Needed to Control Inflation
July 11, 2023
Oil prices are getting support from comments made from OPEC Secretary General Haitham Al Chais that OPEC estimates global demand for all forms of energy will rise by 23% through 2045. He warned that it the world was going to meet this demand the global oil industry will need invest 12.1 trillion dollars and that is not happening.
The IEA also offered supportive comments when it said it believes demand from China is going to improve and that coupled with OPEC+ production cuts is going to tighten up crude supply demand balance before the end of the year despite a sluggish economy.
San Francisco Federal Reserve President Mary Daly reiterated that she believes two more rate hikes this year will likely be needed to lower inflation, while Cleveland Federal Reserve President Loretta Mester also signaled more rate increases. The economic concerns that raising rates will slow the economy are still a head wind for energy prices. The struggle between low inventories and demand continues to be hard to figure out and keeps these markets in a trading range. Crude oil is close to its 100-day moving average and a strong settle over that level will bring out more buyers. But a failure into the average will add to the selling. The market is likely to just stayed balled up in congestion.