Energy companies saw a boost in their stock prices as U.S. crude futures closed the day with a 1% increase.
Market Reaction to Powell’s Speech and Refinery Fire
Initially, the focus of the oil markets was on Federal Reserve Chair Jerome Powell’s speech in Wyoming. There were concerns about the possibility of the Fed raising rates in the near future, which led to a bearish sentiment. However, investor attention shifted when a fire broke out at Marathon Petroleum’s Garyville, La., oil refinery. This incident intensified worries about a decline in global fuel inventories.
Powell’s Speech: “Hawkish” Yet Moderated
Powell’s speech, characterized by analysts and economists as “hawkish,” appeared to be less aggressive in terms of further tightening than some had anticipated. Economists also noted that Powell set a higher threshold for future rate increases. However, he did caution about persistently high inflation levels.
Decrease in U.S. Oil Rigs
According to oil-field-services firm Baker Hughes, the number of U.S. oil rigs declined by eight this week, reaching a total of 512. This figure demonstrates a decrease of 93 rigs from the previous year.