Crude oil trading alert: Oil prices suffer from Iran or resumption of oil exports, waiting to see if Powell's speech can be more hawkish

By    26 Aug,2022

U.S. oil traded near $93/barrel; oil prices retreated nearly 2.5% on Thursday, weighed down by investors preparing for the possible return of sanctioned Iranian oil exports to the global market, and weaker gasoline demand also weighed on oil prices after Fed Chairman Jerome Powell spoke at the annual meeting of global central banks on Friday, amid concerns that rising U.S. interest rates would weaken fuel demand.


Negative factors affecting oil prices

[Oil prices suffer from Iran may resume oil exports].

Talks between the European Union, the U.S. and Iran on resuming the 2015 nuclear deal continue, with Iran saying it has received a "final" U.S. response to the EU's resumption of the deal. Investors braced for the potential return of sanctioned Iranian oil exports to global markets, with Bob Yawger, head of energy futures at Mizuho Bank, saying, "Nobody wants to jump in here and take a big position when you could be ambushed by headlines about Iran at any time."

[Powell may hint at further policy tightening] 

Nikolaj?Schmidt, chief economist at Prudential Group International, said Fed Chairman Jerome Powell may deliver a hawkish speech at Friday's Jackson Hole symposium. U.S. inflation remains high and is expected to remain above target for a long time to come, and current wage increases are very much at odds with the Fed's goal of curbing price increases, he said. Schmidt said there's only one thing to do when it comes to monetary policy, and that's to tighten further. He said he expects we will see a central banker who is not only ready to fire, but will also raise interest rates repeatedly.

[U.S. media says there is still Russian fuel coming into the U.S.]

In March, President Joe Biden announced that the U.S. would ban all oil, gas and energy imports from Russia, aiming to hit the main artery of the Russian economy. He said, "This means that U.S. ports will no longer accept Russian oil and the American people will strike another powerful blow against Russia's 'war machine.'" However, the Associated Press found that about 1 million barrels of Russian crude oil still arrived at the Philadelphia port the week the measures were announced, and about 75,000 barrels of Russian tar entered ports in Texas bound for refineries in Valero. And by recently, those shipments continued to Valero, ExxonMobil and other companies. ExxonMobil's media manager responded that the July oil shipments came from Kazakhstan and were not affected by the sanctions.

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