Fed Stimulus Remains & OPEC+ Closer to Oil Deal

Yesterday, the Federal Reserve (Fed) Chairman Jerome Powell communicated the same rhetoric the Fed has been using in recent months: ‘inflation remains transitory’ while fiscal stimulus continues. Even so, on the first day of the Fed’s meeting, Powell stressed that if the inflationary data continue, and exceed 2%, “we would absolutely change our policy as appropriate,” he said. He also stated that the inflation data had been “higher than expected and hoped for”, noting that a large percentage of the rise came from a small group of goods and services. During Powell’s remarks, yields on 10-year Treasury bonds fell to 1.35%. However, the Fed’s commitment to continuing the monthly injection of $120 million into the market caused both the Dow Jones and the S&P 500 to rise 0.1% respectively.

Possible OPEC+ Countries Agreement

The Fed Chairman’s speech came on the same day that the International Energy Agency (IEA) released its June oil demand data. The IEA noted that demand was 3% lower compared to the same period in 2019. By December, the agency expects it to return to near parity. There is destabilization in oil prices. The pressure on prices comes amid tensions between OPEC+ member countries, a return to normality, people planning holidays again, while demand for plastic production and EPI equipment is rising. Disagreements among the 23 countries that make up OPEC+ caused a breakdown in talks on renewing the agreement on oil barrel production. However, yesterday, delegates from the United Arab Emirates and Saudi Arabia acknowledged a return to talks. This development between the two countries could lead to the expected agreement to increase oil production in the coming months. Yesterday, West Texas Intermediate (WTI) fell 0.8% to $72.52 a barrel. Trade global indices, oil, forex, metals, and cryptocurrencies at Traders Trust, a trusted broker that has been in the financial markets for over a decade. Open a trading account with us and take advantage of our 200% Deposit Bonus that triples your initial capital.