- Oil trades lower amid another rate hike by the Fed
- The Federal Reserve approved a 75-basis points rate hike on Wednesday and indicated it would maintain its hawkish stance
- Fed Chairman Powell hinted that any further hikes might be more moderate
- He added that the time to reassess the pace of increases "is coming," and "It may come as soon as the next meeting or the one after that ... No decision has been made"
- The USD Index (DXY – a proxy for U.S. Dollar strength against a basket of six international currencies) strengthened relative to its recent lows and is at its 20-year high
- A stronger dollar (DXY Index) can cause foreign buyers of dollar-denominated commodities to pay more for the same amount of goods
- China's National Health Commission pledged support for COVID-zero policies yesterday, adding that the approval of zero-tolerance continues to be the primary strategy for battling COVID-19 (BBG)
- NHC chairman Ma Xiaowei stressed the significance of controlling outbreaks at the lowest possible cost while implying that China must "maintain the general approach of preventing importing cases and domestic resurgence"
- The remarks follow unverified reports on Chinese social media that hinted at a potential COVID-zero policy exit strategy
- China's strict COVID curbs continue to weigh on crude demand as they have adversely impacted business and economic activity
- Diesel refining margins fell in Asia and Europe amid expectations of an increase in supply from key producers (BBG)
- In Asia, diesel refining margins on Thursday were around $37/Bbl, down nearly $7 from last Friday, while margins in Europe have fallen 14% this week
- China is expected to increase its diesel exports following the issuance of a new quota to refiners and dealers, and shipments from key Russian Baltic and Black Sea ports are set to surge this month too
- Additionally, France's refineries are now on the road to recovery after strike action hindered domestic output
- Oil is in long-term "decline mode," according to the energy minister of the UAE, one of the biggest crude exporters (BBG)
- UAE's energy minister Suhail al Mazrouei said, "To assume oil is going to be there forever is wishful thinking" at the Adipec energy conference in Abu Dhabi
- "No matter how much we defend it, it's in decline mode," added Al Mazrouei in a speech to young workers in the UAE, advising them to focus on energy as a whole rather than just oil