At the beginning of the Asian market on December 16, U.S. oil was trading around $76.15 per barrel; oil prices fell more than 1% on Thursday as the strength of the U.S. dollar and further interest rate hikes by major global central banks made traders worried about the outlook for fuel demand.
This year it will be bone-chilling, next year it will freeze to death
On December 15, the Federal Reserve announced that it would raise the target range of the federal funds rate by 50 basis points to a level of 4.25% to 4.5%, in line with general market expectations. This is the seventh consecutive rate hike by the Fed this year. On the same day, the Federal Reserve released a summary of its economic forecasts, lowering its median GDP growth forecast for next year by 0.7 percentage points to 0.5%.
Some experts said that the effect of raising interest rates to curb inflation is slow and may not be felt until next year. The spillover effects of the Fed’s interest rate hikes and the pressure on the economy to fall into recession will have a negative impact on the global economy and financial markets, making economic recovery more difficult.
The Federal Reserve issued a statement after its regular monetary policy meeting saying that recent indicators point to moderate growth in U.S. spending and production, strong job growth, and low unemployment. Inflation remains high. The Federal Reserve attaches great importance to inflation risks and seeks to achieve its goals of full employment and a longer-term inflation rate of 2%.
Federal Reserve Chairman Jerome Powell later held a monetary policy press conference. He said, “We have more work to do, and we expect continued interest rate increases to be appropriate to be sufficiently restrictive.” He also pointed out that no interest rate cut is expected in 2023, and the extent of the rate increase announced at the meeting in February next year will depend on economic data.
In addition, the Federal Reserve lowered the economic growth rate. Compared with September, the Federal Reserve lowered the GDP growth rate in 2023 from 1.2% to 0.5%. The Fed also predicts that the unemployment rate will also rise next year, rising from the current 3.7% to 4.6% by the end of 2023.
This year, many people have already felt the chill. What I want to say is that this is not a climax. Next year, the real pressure on the global economy will really come.
Increased risk of recession weighs on oil prices
After the Federal Reserve raised interest rates by 50 basis points in December, the European Central Bank, the Bank of England, Norway, Switzerland, Mexico, the Philippines, etc. all raised interest rates by 50 basis points yesterday. The coming wave of global interest rate hikes has intensified market concerns about economic recession. Edward Moya, senior market analyst at data and analytics firm OANDA, said, “Crude oil prices are lower as global recession risks increase after another round of strong policy tightening actions by multiple central banks, with risk aversion quickly As temperatures heat up, the oil market’s recent rally loses momentum.”
A section of the Keystone pipeline between the United States and Canada has been restarted, allowing Canadian crude oil to resume flowing to U.S. Midwest refineries. Gulf Coast inventories surged last week, suggesting the market remains well-supplied despite pipeline disruptions that disrupted crude deliveries to Cushing, Oklahoma, and other areas. TC Energy Corp. is continuing to repair and repair parts of the facility affected by last week’s oil spill.
The U.S. Treasury Department said on Thursday that U.S. Deputy Treasury Secretary Adeyemo will urge allies to continue providing support to Ukraine and discuss how to implement a Russian oil price cap when he visits the German capital Berlin and Brussels this week. Adeyemo begins a three-day visit on Friday. The U.S. Treasury Department said Adeyemo will focus on further tightening sanctions on Russia during talks in Berlin and Brussels to prevent Russian President Vladimir Putin from obtaining needed military equipment, limit funding for the Russian-Ukrainian war and boost the Russian economy. income. During Adeyemo’s visit to Europe, he will negotiate with allies about the $60 price ceiling for Russian oil that will take effect on December 5.
International oil prices will remain high next year, but will decline. In 2023, international oil prices are expected to remain high but fall back, with the average Brent price ranging from 82 to 88 US dollars per barrel, and the benchmark value of about 85 US dollars per barrel.
The price of polyester filament has been rising for days, and the focus of transactions continues to rise. Under the guidance of rising buying sentiment in the downstream, and the recovery of terminal demand, it has driven the enthusiasm of downstream users for production. The production and sales rate of polyester filament has picked up. This week, the production and sales of polyester filament are at 100%. At present, it is understood that most customers have advanced their stocking cycle due to today’s price increase. Some customers have completed stocking this week and plan to take a holiday in mid-January. In the future, production and sales will still depend on the revitalization of consumer demand. Production reduction on the supply side can only balance supply and demand, but is not a long-term strategy. Taken together, downstream weaving factories are doing well excluding orders, and some factories are more likely to have an early holiday this year. The coming of the cold wave has, to a greater extent, boosted theThe production and sales of travel clothing is good news for weaving factories to clear inventory, but it may be too late to actively stock up. This year’s market has basically settled. Looking forward to 2023, the demand side should be better than this year. , but there is a high probability that it will not be better than the year before.
Comprehensive overview:
There is still support on the cost side, and demand for some varieties has been good recently. The price of polyester filament is expected to continue its steady upward trend today.
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