All Eyes on Fed Chair

By: Peter Haralambakis / March 19, 2018

As the drones of the woodwind instrument that has been used for over a millennium fades into thin air from the most recent Feast of Saint Patrick, we await, arguably, the most anticipated FOMC meeting in recent years for indications on the Fed’s interest rate policy going forward. The Federal Reserve’s first meeting under Jerome Powell’s leadership is over the next couple of days and will hopefully provide in plain understandable terms, the Fed’s actions on whether there will be 3 or 4 interest rate hikes this year. If the Fed is leaning towards the 4 or maybe even 5 interest rate hikes, the higher borrowing costs which may trigger less spending by businesses and consumers, will most certainly keep global equity markets on edge. As financial markets turn cautious because of continuing concerns about the threat of a global trade war and inflation fears continue to be a hot topic, the energy sector may continue its grind in a tight range until fundamentals give it a nudge one direction or another. As of 1:00pm EST, WTI for April delivery is down $0.29 at $62.05, HO is unchanged at $1.9118 and RBOB is down $0.0100 at $1.9359. CL Continuation-26.png

The Dow Jones Industrial Average is down 396 at 24,569 and S&P 500 Index is down 46.5 at 2,709.5. 

CL Continuation vs ES Continuation.png

Since the beginning of November 2017, WTI crude oil (purple line above) has been trading lockstep with the financial markets (S&P 500 gold line above). With equity markets a driving force behind some of the moves in the energy sector bullish indicators such as geopolitical tensions, comments by the Saudi Crown Prince Mohammed bin Salman about developing nuclear weapons if arch-rival Iran does, and a weaker dollar by 0.50% currently, are not enough to keep the bulls pointing their horns in an upward direction and have prices breakout above the major resistance level of $63.74 in the WTI. For now we must sit on our hands and wait for some “hawkish” or “dovish” cues by our Fed Chair Jerome Powell and some fundamental data from our Department of Energy on Wednesday in order to go long or short in the near term.


Categories: Industry Update


Peter Haralambakis

Written by

Peter Haralambakis

Peter Haralambakis is a Supply and Trading Business Development Manager at Guttman Energy with over 13 years of experience in commodities trading, analysis, and risk management in products ranging from Corn and Soybeans to Crude Oil Futures and Options to Financial and Physical Biofuels to Natural Gas and Natural Gas Liquids.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


Comments

Subscribe to our blog

Price Feed

Stay up-to-date on current fuel prices and market trends with our NYMEX price feed (15 minute delay to the live market).

© 2018 Market data provided and hosted by Barchart Market Data Solutions. Fundamental company data provided by Morningstar and Zacks Investment Research. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.

Categories

Contact Us