OPEC raised its forecast of oil supplies from non-member countries in 2017 as new fields come online and U.S. shale drillers prove more resilient than expected to cheap crude, pointing to a larger surplus in the market next year.
A wave of risk aversion engulfed the financial markets last week following the instances of central bank caution which weighed heavily on investor risk sentiment. Asian shares were depressed on Monday with most stocks suffering their largest losses since June as fears over central banks adopting an inactive stance sparked market jitters.
You might be wondering who Rosengren is, but apparently he’s pretty important—that’s Boston Fed President Eric Rosengren I’m talking about. He single-handedly knocked the market out of the box on Friday when he said, “Futures markets are wrong, and the Fed likely should hike rates sooner than implied.”
While the crude oil market is looking for supply to rebound this week, there is now rising concern about demand. With the Fed talking up raisng interest rates and global central bankers questioning the effectiveness of monetary policy, it seems that there is not a lot of optimism in the global economy.
Wait-and-see is becoming a global strategy followed by the Reserve Bank of Australia, Bank of Canada and European Central Bank and up next will be the Bank of England that will publish its monetary policy committee decision on Thursday, September 15 at 7:00 am EDT.
Crude oil prices edged lower on Friday but were still set for their first weekly gain in three weeks after Russia and Saudi Arabia agreed to work together to help rebalance the markets and after a surprisingly large drawdown in U.S. crude stocks.
As we head into the end of the trading week, attention will remain on a few familiar topics that have dominated recently, the Federal Reserve, crude oil and the aftermath of the ECB response, or lack of, to new lower inflation and growth forecasts.