Oil prices saw a substantial 3% surge, nearing $100 a barrel, hitting a fresh 10-month high on Wednesday. The rally was ignited by concerns over tightening global crude supplies, with lower-than-expected US stockpiles adding to the bullish sentiment.
Brent crude, the international benchmark, reached as high as $97.06 per barrel, marking its highest intraday level since November 2022. In parallel, West Texas Intermediate (WTI), the US equivalent, jumped 3.6% to reach $93.69 per barrel, driven by declining stockpiles at a critical delivery hub, as per weekly government data.
The Energy Information Administration’s latest report revealed a 2.2 million barrel drop in US commercial crude oil inventories from the previous week, further constraining supply. Additionally, WTI delivery point inventories hit their lowest point in over a year.
Market experts believe that the recent price correction has lost momentum, and the market is now pointing to higher oil prices. This surge comes as some of the world’s major oil producers have announced supply cuts through the end of the year, compounding concerns over persistent inflation in the US and Europe.
In response to these developments, equity markets faced pressure, with the S&P 500 falling 0.4% and the Nasdaq Composite down 0.3%. European stocks also struggled, with the Stoxx Europe 600 index closing 0.2% lower, marking its fifth consecutive day of losses.
US government bond yields continued to rise, driven by the Federal Reserve’s hawkish guidance on extended higher interest rates due to inflation concerns. The 10-year Treasury yield reached a post-2007 high of 4.59%, while the 30-year note yield advanced to 4.71%.
As investors accept the likelihood of higher rates for a more extended period, equities are losing their appeal, and bonds are becoming increasingly attractive. Attention now turns to upcoming US and eurozone inflation data to gain insight into central banks’ future monetary policy decisions.
In other economic news, US durable goods orders showed a notable improvement, rising 0.2% in August compared to the previous month, exceeding expectations. The dollar strengthened by 0.4% against a basket of peer currencies, reaching a fresh 10-month high.
Lastly, China’s industrial sector exhibited signs of stabilization as profits fell by 11.7% year-on-year in the first eight months of 2023, a smaller decline compared to the previous seven months, suggesting that recent support measures are aiding the world’s second-largest economy.
The Hang Seng index in Hong Kong rose by 0.8%, and China’s CSI advanced by 0.2%, breaking a two-day losing streak. Stay tuned for updates on these evolving economic trends.
Photo Source: Google
27th September 2023
Delino Gayweh
Serrari Financial Analyst
Article and News Disclaimer
The information provided on www.serrarigroup.com is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
www.serrarigroup.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an "as-is" basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
In no event will www.serrarigroup.com be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.
The articles, news, and information presented on www.serrarigroup.com reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.
The content on www.serrarigroup.com may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, www.serrarigroup.com takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.
By using www.serrarigroup.com, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website.
www.serrarigroup.com, reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.
Serrari Group 2023
