Granholm calls for reduced fuel exports as the Federal Reserve pledged to fight inflation

The US Energy Secretary urged domestic oil refineries this month
not to increase exports of fuels such as gasoline and diesel,
adding that the Biden administration may need to consider action
if factories do not build up inventories,
while the Fed pledged to continue fighting inflation.

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US Energy Secretary urges refineries not to increase fuel exports

The Fed pledges to continue fighting inflation

South Korea could end policy tightening before Fed

US Energy Secretary urges refineries not to increase fuel exports

US refineries have boosted exports of oil products this month as domestic crude
oil production rises and global fuel demand continues to recover.

In a letter sent on August 18, Energy Secretary Jennifer Granholm urged
seven refineries to build up fuel supplies as the peak of the hurricane
season begins in the United States.

“Given the historic level of exports of refined products in the United States,
I urge you once again to focus in the near term on building inventories in the United States,
rather than constantly selling existing inventories and increasing exports,
” Granholm said in the letter to refineries.

High US oil exports were a concern for President Joe Biden’s administration
this summer as gasoline prices briefly reached a record $5 per gallon,
helping drive inflation to 40-year highs.

Federal meteorology predicted that the hurricane season would be above average in the Atlantic,
which could be a risky time for refineries.

Granholm said the administration is in talks with state officials along the east coast,
with gasoline levels reaching their lowest in nearly a decade.

She said that she was putting gasoline and heating oil reserves in the northeastern United States,
which contained 2 million barrels of fuel,
in “active readiness” for possible release,
and preparing other emergency measures.

Refiners said the embargo could flood domestic markets with fuel
and lead to some factories cutting production,
which could reduce supplies and put progressive pressure on prices.

In addition, refineries in the northeast import crude oil,
fuel and trade that can be affected by the export embargo.

artical name Granholm calls for reduced fuel exports

The Fed pledges to continue fighting inflation

The broader US market averages fell more than 3 percent across the board on Friday;
as IT stocks led the downward trend last week, while the energy sector rebounded,
following tough comments from the Federal Reserve.

At Jackson Hole’s annual conference on Friday, Fed Chairman Jerome Powell suggested
that interest rates should probably remain high longer.

Fed fund futures are priced at an 85 percent probability
that rates will be 125 to 150 basis points higher by the end of the year.

Elsewhere, preliminary US purchasing managers’ index data for August on Tuesday
indicated a decline in economic activity this month.

On the economic front, consumer confidence will be announced for August next Tuesday,
and the Institute for Supply Management (ISM) will publish August
data for the manufacturing sector on Thursday.

The August employment report is due on Friday,
with economists looking to add 285,000 non-farm payrolls and
the headline unemployment rate to remain at 3.5 percent.

Given slowing growth expectations and the potential for higher interest rates,
it may become difficult to achieve investment gains in 2022, and as a result,
it may be difficult for any investor to determine what and when to buy.

artical name Granholm calls for reduced fuel exports

South Korea could end policy tightening before Fed

Korean Central Bank Governor Ri Chang-young said on Saturday that the Bank of Korea
should continue raising interest rates until inflation declines,
but that the central bank would probably not stop its tightening before the US Federal Reserve.

RI also added that the South Korean Central Bank is ready to take steps
including intervening to stabilize the won against the dollar,
if necessary if the bank determines that speculative forces cause the currency to fall.

Asia’s fourth-largest economy was at the forefront of global tightening,
with the Central Bank of Korea among the first central banks to abandon monetary
stimulus in the pandemic era,
raising its key policy rate by 2 percentage points since August last year to 2.5 percent.

The appreciation of the federal

interest rate-driven dollar has increased inflation
in many open economies around the world, including South Korea,
where the local currency is depreciating.

RI added that South Korea’s inflation is largely the result of external issues such as energy prices.

Although he expects domestic inflation to ease in August compared to 6.3 percent in July,
it is too early to say it has peaked, especially as winter approaches, gas prices may rise again.

South Korea’s inflation is expected to be around 5 percent by the end of 2022,
falling until 2023, and its central bank, like many others, is targeting a 2 percent inflation.

At Jackson Hole, central bankers largely used
the same language to describe their fight against price hikes,
although the main problem, inflation, is much higher than their specific targets,
and therefore sources of price pressure and policy responses vary between countries.

Even the fallout from Fed Chairman Jerome Powell’s speech on Friday,
which led to a sell-off in US stock markets, will be watched,
focusing on how to open the won on Monday, Ri said.

The Federal Reserve chairman promised that US interest rates would move to
“restrictive” levels and remain there as long as necessary to lower US inflation.

The won, one of Asia’s worst performing currencies, has fallen by about
11 percent against the dollar this year, and local officials have stepped up
control of currency movements.

artical name Granholm calls for reduced fuel exports

Granholm calls for reduced fuel exports

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