Technical & Fundamental Oil Reports Specialists

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Its interest rates stupid

Published Thursday, August 21st, 2014

The monthly game of reading the minutes preoccupied markets yesterday. The minutes that is of the Bank of England and Federal Reserve meetings that took place a couple of weeks ago. The timing of an interest rate hike has the stock and bond markets on edge and when they are skittish so are all the other financial markets.

It turns out that two members of the BoE monetary policy committee voted for a rate increase and one member of the Federal Reserve, which gave a more hawkish flavour than expected. However, since the committees met both the UK and US have turned in monthly inflation figures that were lower than expected. Perhaps, with that information to hand, the hawks would have returned to their perch. It’s now all eyes on Jackson Hole and Janet Yellen’s latest musings.

Oil prices had an up day for no apparent reason other than perhaps a technically driven rebound. Rockets are flying around Gaza again and the first Es Sider cargo for a year is loading in Libya. There are reports of traders fixing ships to take contango infected crude for storage in South Africa. Moscow has begun a hamburger war with the US by closing four McDonalds and the euro broke below $1.33 for the first time since November. Note that the Platts dated Brent fixing has come in below $100 bbl on two days this week. The last time it was fixed below three was in May last year.

to read the rest of the report, please click here 

Posted by David Hufton