Stock markets were explosively volatile this week, with most areas sprinting into record levels as the mixture of stabilizing oil prices and improving economic data across the globe boosted risk appetite.
The American Petroleum Institute (API) reported another massive 5.04 million barrel drop in crude oil supply, stirring talk of oil market rebalancing. Yet, an even bigger 9.75 million-barrel increase in gasoline supply is tempering market excitement. This comes as the OPEC Secretary General has positive things to say about OPEC production cuts, and a speech by Fed Chair Janet Yellen that says U.S. interest rates will be at 3% by the end of 2019.
In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1/2 to 3/4%. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a return to 2% inflation.
Buffy may have her way on slaying vampires, but she has nothing on Fed Chair Janet Yellen when it comes to killing commodities. Yellen’s testimony to Congress basically assured us that the Federal Open Market committee will raise rates in December as the economy is making significant progress.
What will have more impact on crude oil trading today? Will it be news out of OPEC, or the testimony in Congress by Fed Chair Janet Yellen? We know that comments from the Russian oil minister Alexander Novak saved oil from selling off more after he said that he remains optimistic that OPEC can get a deal done by the time of the official meeting on Nov. 30.