During the Asian session on Wednesday (April 17), U.S. crude oil fluctuated within a narrow range and is currently trading around $85.47 per barrel. Oil prices edged lower on Tuesday after economic headwinds weighed on investor sentiment, dampening gains from geopolitical tensions as markets focused on Israel's response to Iran's weekend attack on Israeli territory.
Brent crude oil futures for June delivery fell 0.36% on Tuesday to trade at $90.09 a barrel. U.S. crude oil for May delivery fell 0.42% on Tuesday to close at $85.27 per barrel.
The US dollar continues to rise as Fed officials' hawkish speech dampens expectations of interest rate cuts
Federal Reserve Chairman Jerome Powell said on Tuesday that a slew of disappointing data showing stronger-than-expected inflation means the Fed may need more time than previously thought to be confident that inflation is on the path to 2%.
"The recent data clearly do not give us greater confidence, but rather they suggest that it may take us longer than expected to gain that confidence," Powell said at an event at the Wilson Center in Washington.
"Rising interest rates are killing the market because the Fed appears to be stuck in a quagmire while the economy continues to expand," said Tim Snyder, an economist at Matador Economics.
Affected by the hawkish speech of Federal Reserve officials, the market's expectations for a rate cut by the Federal Reserve were further postponed. The U.S. dollar index continued its gains on Tuesday, setting a new high of nearly five and a half months to 106.52, while the U.S. 10-year Treasury yield was the highest on Tuesday. It touched 4.696%, a new high in the past five months. This put slight pressure on oil prices.
Tensions in the Middle East remain tense, but likely not to worsen
U.S. Treasury Secretary Yellen said the United States intends to impose new sanctions on Iran in the coming days due to Iran's unprecedented attack on Israel. These actions may weaken Iran's oil export capabilities.
As a major oil producer in the Organization of the Petroleum Exporting Countries, Iran's daily crude oil production exceeds 3 million barrels.
Amid international pressure to avoid further escalation of the conflict in the Middle East, Israel's war cabinet was scheduled to meet on Tuesday for the third time in three days to decide on a response to an Iranian attack, an official said.
But the third meeting has now been postponed to Wednesday as Western allies hope to quickly impose new sanctions on Iran to help dissuade Israel from a major escalation.
Several Israeli officials made it clear on Tuesday that they would respond to Iran's military strikes against Israel, but Israel's wartime cabinet has yet to reach a consensus on how and when to respond. At the same time, some Israeli officials said that Israel's response was not intended to escalate the regional situation and hoped that the two sides could stop "attacking each other" after this round of responses.
Israeli media reported that the Israeli military has finalized the type of counterattack against Iran, but the time has not yet been determined. The United States has expressed confidence that Israel will not attack Iran directly but instead focus on its proxies.
Israel Defense Forces Chief of Staff Herzi Halevi suggested that the time for counterattack was not urgent. He said they were implementing a home front policy that would allow citizens to live almost as usual during Passover week at least. A simple interpretation of the signals suggests that a major attack is not imminent in the coming days and may even be delayed for longer.
Russian media quoted the Kremlin as reporting that Iranian President Raisi told Russian President Vladimir Putin that Iran is not interested in further escalating the situation in the Middle East.
Matthew Ryan, head of market strategy at global financial services company Ebury, said, "So far, the market seems quite optimistic about the escalating tensions and is cautiously optimistic that Israel's response will be restrained and a full-scale war will be avoided."
White House senior adviser: US may release more SPR to keep oil prices low
U.S. President Joe Biden will do everything he can to keep gasoline prices at affordable levels, senior White House adviser John Podesta said at an industry conference on Tuesday when asked about future releases from the Strategic Petroleum Reserve (SPR).
In 2022, the Biden administration sold 180 million barrels of oil over about six months, the largest sale ever, in an effort to lower gasoline prices after the Russia-Ukraine conflict. Republicans have slammed the arms sales, which have helped push U.S. stockpiling levels to their lowest levels in about 40 years.
"The president has done this before, and I think he wants to keep gas prices affordable and he's going to do everything he can to make sure that happens," Podesta said.
API crude oil inventories increase for second consecutive week
The latest data showed that API crude oil inventories increased by 4.089 million barrels last week, the second consecutive weekly increase, and the increase exceeded market expectations of 400,000 barrels. Gasoline inventories fell by 2.509 million barrels.
The official U.S. EIA crude oil inventory data will be released at 22:30 Beijing time, and investors need to pay close attention. In addition, we need to pay attention to further news related to the situation in the Middle East. Overall, the daily K-line has sent out some peaking signals. If the geopolitical situation does not deteriorate further, under the influence of multiple negative factors, short-term oil prices will face the risk of further correction, or even declare a short-term peak.
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2024-04-17
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