USA: Oil prices fell 5.5% on expectations of reduced demand in China

Published May 3, 2023

Tridge summary

The US Federal Reserve's decision to raise interest rates beyond 5% to combat inflation is causing a ripple effect on financial markets, leading to a drop in demand and prices for oil and commodities, including grains and oilseeds. This is further exacerbated by an unexpected decline in China's manufacturing activity and Russia's record oil exports to China, which contradict promises to reduce production and sales. Despite these increases, Indian, the main buyer of Russian oil, has seen record low prices. This situation is impacting the market, with July Brent oil futures and WTI oil prices experiencing a significant decrease. The palm oil market is also under pressure due to a drop in exports from Malaysia and strong demand in the US, driven by tight supply and robust soybean exports, while sunflower oil prices are low due to low demand.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The US Federal Reserve's intention to raise interest rates 25 basis points above 5% to curb inflation is sending stock and commodity markets into a frenzy, reducing speculative demand and prices for oil and commodities, including grains and oilseeds. In addition, the market is under pressure from an unexpected decline in the index of manufacturing activity in China in April, as well as information about Russia's increase in oil exports, contrary to statements about reducing production and sales. According to Bloomberg, in recent weeks the Russian Federation has increased its seaborne oil exports to a record 4 million barrels/day (since the beginning of the full-scale invasion of Ukraine, supplies have exceeded this figure only once). The reduction in oil production in the Russian Federation announced at OPEC+ two months ago has not yet been confirmed, while the country's authorities classified data on production and export of oil and oil products. India remains the main buyer of ...

Source: Graintrade