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ADP shows employers added 177,000 jobs in August: Why lower than expected?
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bullrider_21 joined discussion · Aug 30, 2023 05:05

$RH PetroGas (T13.SG)$$Rex Intl (5WH.SG)$$Dyna-Mac (NO4.SG)$...

Crude prices rose more than 1% Tue for their first meaningful rally in 2 weeks as Hurricane Idalia threatened to strike at the heart of oil production and power generation in the U.S. Gulf of Mexico.
Idalia skirted past its originally-thought destination Cuba and headed towards Florida's Gulf Coast, where it was expected to slam ashore on Wed, disrupting crude output and causing electricity outages. More than 20 counties in western and Central Florida have already issued evacuation orders.
Brent settled up 1.3% at USD85.49 on Tue, while WTI crude settled up 1.3% at USD81.16.
Concerns over slowing growth in China have kept crude prices boxed at between USD80 and USD85 over the past month.
But the risk of storms hitting the U.S. Gulf Coast of Mexico could change that, analysts said.
"The market is now vulnerable to spikes on the back of surprise outages and hurricane-related issues in the US," said Craig Erlam, analyst at OANDA.
"On the supply side, major producers appear committed to ensuring the market remains tight and prices higher. They had little success earlier in the summer but that is no longer the case."
U.S. oil major Chevron evacuated staff from three Gulf of Mexico oil production platforms ahead of the hurricane, wire reports said.
Supply concerns were also heightened by a fire at a Marathon Petroleum refinery last week after a chemical leak ignited two giant storage tanks filled with naphtha.
On Mon, Marathon said it planned to restart units at the 596,000-bpd refinery in Garyville, Louisiana, the third-largest in the United States.
U.S. oil drillers were also cutting the number of rigs actively pulling crude out of the ground, indicating that production could further slow in coming months as the "supply squeeze is becoming more painfully obvious" said Phil Flynn, analyst at OANDA.
But John Kilduff, partner at Again Capital pointed to the three-year highs in crude production estimated back-to-back over the past three weeks by the EIA.
"The missing words here are 'production efficiency', which has grown by leaps and bounds in the U.S. oil industry," said Kilduff. "This industry is pretty dexterous when it comes to meeting demand. We will have adequate oil, I believe, despite the storms and that should prevent prices from getting out of hand because of the storms."
Some traders maintain a somewhat outlook for oil this week ahead of an abundance of economic data that could influence the Fed at its next decision on U.S. interest rates on Sep. 20.
U.S. job openings slowed their most in 2.5 years and consumer confidence plunged as well.
A second reading on second-quarter U.S. GDP growth is due on Wed, while readings on personal consumption expenditures inflation - the Fed's preferred inflation gauge - are due on Thu, and Aug nonfarm payrolls data are expected on Fri.
FedChair Jerome Powell on Fri said a week ago that the U.S. central bank may need to raise rates further to cool stubborn inflation, which would potentially hit economic activity in the U.S., weighing on demand for crude.
Market participants were also on the lookout Tue for U.S. weekly oil inventory data, due after market settlement from API.
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