Market Insights

August 31, 2015 • Posted in Market Insights
  • Energy/ Economy Overview
  • Oil futures settled on Friday nearly 12% higher than last week’s close, interrupting a recent downtrend
    • The increase was attributed to continuing tensions in the Middle East
    • Expectations are that weakness in oil prices will eventually prompt sizable declines in production

WTI Crude Oil & Brent Crude Oil 08312015

  • Federal Reserve vice-chairman Stanley Fischer left the door open Saturday for a Fed rate increase in September, saying the factors that have kept inflation below the central bank’s target level have likely begun to fade:
    • The US government estimated Thursday that the economy grew at a healthy 3.7% annual rate in the April-June quarter
    • The US unemployment rate is at a seven-year low of 5.3%
  • Benzene illustrates the volatility in feedstock pricing this year:

Benzene chart illustrates the volatility in feedstock pricing this year

    • Benzene prices have been in steady decline for several weeks after a short stay above $3/gal in late July
    • Benzene buying interest has softened while the downtrend in upstream crude oil has kept downward pressure on US benzene
    • The falling price of oil is affecting the price of almost every industrial commodity and is also affecting international freight rates

 

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