• 3 minutes "Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 9 minutes "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 7 days 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 5 days Energy Armageddon
  • 3 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 13 hours "Forget Oil, The Real Crisis Is Diesel Inventories: The US Has Just 25 Days Left" by Zero Hedge - 5 Stars *****
  • 20 hours "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 17 hours "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 20 hours The Federal Reserve and Money...Aspects which are not widely known
  • 4 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 2 days Is Europe heading for winter of discontent with extensive gas shortages?
  • 5 days Сryptocurrency predictions
  • 2 days Goldman Betting on Cryptocurrencies
  • 10 days Putin and Xi Bet on the Global South
Africa’s Energy Trilemma

Africa’s Energy Trilemma

Africa is facing a slew…

Bad News For Oil Prices As Economists Predict Aggressive Action From The Fed

Interest rate hikes by the Federal Reserve as it struggles to rein in inflation have spurred expectations of a recession and the related negative implications for oil prices. Now, economists expect the Fed to hike higher than previously thought and fears of a recession are growing.

A poll conducted by Reuters suggested that the Fed could raise interest rates to a higher terminal point than was forecast just two weeks ago after the U.S. central bank hiked the benchmark rate by 75 basis points for the third time in a row.

After this move, the majority of economists polled said they expected a fourth hike of 75 basis points in November and another, smaller, hike of 50 basis points in December. This would bring rates to between 4.25 percent and 4.50 percent.

The first and most fundamental implication of this is an increase in the risk of a recession, the likelihood of which the economists polled by Reuters have put at 45 percent for the coming 12 months. The likelihood of a recession occurring over the next two years is even higher, according to the poll, at 55 percent.

A recession is a strongly bearish scenario for oil prices and, as we have seen over the past few weeks, even talk of a recession is enough to weigh on prices. The news of another 75-basis-point rate hike, therefore, would not be welcomed by the oil industry.

At the same time, OPEC+ is keeping its finger on the oil market’s pulse and stands ready to start cutting production if prices fall below a level it considers comfortable. It appears this level has recently risen because while two years ago the cartel said $60-70 was comfortable, now that Brent crude is trading at around $85 per barrel, OPEC+ is considering cuts.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News