In the early hours of yesterday, the Federal Reserve raised its benchmark interest rate by 75 basis points in an attempt to control soaring inflation. Later, Fed Chairman Powell said that another unusually large interest rate hike would depend on the data and would slow down the pace of interest rate increases at some point. It may be appropriate, but it has not yet been decided when to start slowing down the pace of interest rate increases. If necessary, it will not hesitate to take more drastic actions. The Fed will no longer provide such clear forward guidance on interest rate actions.
Yang An, head of energy and chemical research and development at Haitong Futures, said that the Fed’s rate hike was within the market’s normal expectations. After the news was announced, the market showed a typical boots-on-the-ground reaction, with risk assets rising and the dollar falling. Generally speaking, after two consecutive significant interest rate hikes, the Federal Reserve will most likely slow down the pace of interest rate hikes. Although the market still expects that interest rates will be raised to 3.25%-3.5% before the end of the year and another 50 basis points in 2023, the market will usher in a relatively stable monetary policy time window before the September interest rate meeting; the dust of interest rate hikes has settled , market uneasiness subsided, giving investors some positive expectations, causing the US dollar to fall sharply, and various risk assets to rebound. It also raised interest rates by 75 basis points. However, due to the difference in market expectations, the market was completely different from the last panic decline. Different performances. Commodities have the opportunity to continue to organize a sustained rebound, which will also help oil prices recover from the low range, and the downside risk of oil prices breaking through will be eliminated in the short term.
On the demand side, according to Li Yunxu, an analyst at SDIC Essence Futures, the European and American PMI data released last week continued to verify the expectations of downward economic growth. From a micro level, EIA weekly data showed that the apparent weekly gasoline consumption in the United States increased from 8.062 million barrels per day. It rebounded to 8.521 million barrels per day, but there was a significant gap from the level of about 9.2 million barrels per day in the same period last year. From the perspective of the demand cycle of crude oil, since we are still in the recovery cycle of travel activities after the relaxation of global epidemic control measures, there is a certain mismatch with other industrial products. The monthly reports of the three major institutions this month predicted that the annual growth rate of demand next year will be 2 million barrels/ The above expectations for Japan and Japan have not been adjusted. Short-term concerns are mainly reflected in the recurrence of epidemics and the negative feedback of high oil prices on European and American gasoline consumption.
On the supply side, Li Yunxu said that after Biden’s trip to the Middle East, the probability that Saudi Arabia will lead OPEC+ to accelerate production increases has decreased, and it is expected to continue the previous step-by-step production increase pace. At present, the focus on the supply side is still mainly focused on the evolution of European and American sanctions against Russia. The three major institutions’ monthly reports this month have significantly smaller non-OPEC supply adjustments than last month. With Russian production bottoming out in the second quarter and EU sanctions exempted The outlook for the future is clear. The IEA and EIA have both raised their non-OPEC supply forecasts for the second half of the year by more than 300,000 barrels per day. However, there are still large differences in non-OPEC production next year, reflecting the high uncertainty of the current supply outlook. Last week there was market news that EU member states have reached an agreement on an adjustment to sanctions against Russia. Rosneft and Gazprom will be able to export oil to third countries, that is, EU companies participate in Russian oil Trade to third-party countries may be fully compliant, and recently Europe and the United States are still actively promoting plans to limit the price of Russian oil. We need to pay attention to the potential impact of follow-up measures on the implementation of the sixth round of sanctions, which may cause the expected supply cuts of Russian oil to be further reduced. Turn it down.
“Specifically for fuel oil, Singapore’s weekly fuel oil inventory decreased by 1.019 million barrels to 19.802 million barrels. Judging from the performance of the overseas refined oil chain, the gasoline crack spread fell sharply this month, mainly due to weaker than expected demand during the peak travel season in Europe and the United States. Diesel cracking spreads have also declined to a certain extent but are still at a high level. The lack of Russian refining capacity and high European gas prices still have a supportive effect on diesel. Domestically, domestic production of low-sulfur fuel oil hit a new high of 1.313 million tons in June, of which Sinopec’s output of 690,000 tons has also hit a new high, and low-sulfur and high output are expected to be maintained with ample domestic export quotas,” Li Yunxu said.
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