Oil trading reminder: economic growth concerns caused oil prices to plunge more than 5%, and the United States warned Russia of "catastrophic consequences"

At the beginning of the Asian market on Monday, September 26, U.
S.
oil traded near $79.
54 / barrel; Oil prices plunged more than 5 percent to an eight-month low on Friday as the dollar hit another two-decade high and fears that rising interest rates would tip major economies into recession, cutting demand for oil
.

Intraday attention: 2022 FOMC voting committee and Boston Fed President Collins delivered a speech
on the US economy.

Negative factors affecting oil prices

[The probability of a 75 basis point rate hike by the Fed in November is 76.
2%]

According to CME "Fed Watch": the probability of the Fed raising interest rates by 50 basis points to the range of 3.
50%-3.
75% in November is 23.
8%, the probability of raising interest rates by 75 basis points is 76.
2%, and the probability of raising interest rates by 100 basis points is 0%; The probability of a cumulative 100 basis point hike by December is 26.
6%, the probability of a cumulative 125 basis point hike is 69.
2%, and the probability of a cumulative 150 basis point hike is 0%.

The dollar index surged to 113.
23 on Friday, its highest since May 2002 and surpassing a 20-year high set earlier last week
.
It rose 1.
6 percent to 112.
96 in late trading, the biggest weekly percentage gain since March 2020, amid fears that rising interest rates would tip major economies into recession, cutting demand for oil
.
Central banks around the world have followed suit, raising interest rates each, raising the risk of
an economic slowdown.

Edward Moya, senior market analyst at data and analytics firm OANDA, said: "Oil fell
as central banks pledged to fight inflation in unison and global growth concerns went into panic mode.
It appears that central banks are ready to continue aggressive rate hikes, which will weaken economic activity and the outlook
for short-term crude oil demand.
”

[Demonstrations broke out in northern German cities demanding an end to energy sanctions against Russia]

On September 25, local time, according to information disclosed by the local police in the northern German city of Lubmin, a total of about 3,500 people from all over the country gathered in Lubmin, the end of the "Nord Stream-2" natural gas pipeline, to protest the federal government's energy policy
.
The demonstrators' slogan was "Open the Nord Stream 2 project – so that our country has a future.
"
At the same time, the demonstrators also demanded that the German government immediately end energy sanctions against Russia
.
Demonstrators pointed out that once the Nord Stream-2 pipeline is commissioned, Russian gas will again flow to Germany and energy prices can fall rapidly, although the German federal government has repeatedly ruled out the possibility of
using the project.
It is reported that this is not the first time that protests and demonstrations have broken out in Lubmin
.
Earlier this month, more than 1,800 people took part in a similarly themed march
.

[U.
S.
business activity contracted for third straight month in September]

U.
S.
business activity contracted for the third straight month in September, but the decline slowed as improving global supply chains eased inflationary pressures
on businesses.
S&P Global said the preliminary composite PMI output index rose to 49.
3
in September.
The preliminary business input price index fell to 66.
8, the lowest
since January 2021.
The preliminary manufacturing PMI edged up to 51.
8 versus an estimate of 51.
1
.
The new orders index increased
for the first time in four months.
The preliminary services PMI rose to 49.
2
.

[The three major U.
S.
stock indexes fell sharply weekly]

U.
S.
stocks closed sharply lower on Friday, as nervous investors continued to adjust their positions to reflect fears
that the Fed's hawkish interest rate policy to curb inflation would tip the U.
S.
economy into recession.
The Dow Jones Industrial Average narrowly avoided being more than 20% below its record closing high of 36,799.
64 points set on Jan.
4, meaning the blue-chip index is not yet in a bear market
according to a widely used definition.
The S&P 500 and Nasdaq are already in bear markets
.

All three major stock indexes fell sharply on a weekly basis
.
For the week, the Nasdaq fell 5.
03%, the second consecutive weekly decline of more than 5%, the S&P 500 fell 4.
77%, and the Dow Jones Industrial Average fell 4%.

After rising sharply over the past two years, Wall Street took a big hit in 2022 by concerns about a range of issues, including the conflict in Ukraine, the energy crisis in Europe, the global coronavirus pandemic rebound, and tightening
global financial conditions.

Last week, a number of central banks, including the United States, the United Kingdom, Sweden, Switzerland and Norway, announced interest rate hikes to fight inflation
.
However, the Fed's signal caught the market by surprise, and the Fed expects high interest rates in the United States to continue until 2023
.
David Russell, vice president of market intelligence at TradeStation Group, said: "There were some optimists who said inflation could be under control, but the Fed actually told them to sit down and shut up
.
The Fed is trying to rip off band-aids in an attempt to curb inflation
while the job market remains strong.
”

Concerns are heightened
by a period of seasonal weakness in the market, with a poor outlook for a few companies.
After withdrawing its profit forecast last week, FedEx outlined a cost-cutting plan of up to $2.
7 billion on Thursday after falling demand hit first-quarter profits
.
FedEx fell 3.
4%, its lowest closing level
since June 30, 2020.
S&P 500 companies are expected to grow earnings at 4.
6 percent in the third quarter, compared with 5 percent
last week, according to Refinitiv data.

Goldman Sachs cut the S&P 500's target level for the end of 2022 by about 16% to 3,600 as the Fed showed little sign of
backing down from its aggressive rate hike stance.

Ed Moya, senior market analyst at OANDA, said: "We have everyone reassess how far the Fed will go, which is a problem for the economy, and a hard landing is becoming a base case, which is a bad environment
for the US stock market.
" ”

All 11 major sectors of the S&P 500 declined, led by energy stocks, down 6.
8%.

Oil and gas-related stocks plummeted, as oil prices plummeted due to recessionary demand concerns and a strong dollar; Oilfield servicers were hit particularly hard, with Helmerichand Payne plunging 11.
2 percent and Schlumberger down 8.
4 percent
.
Halliburton fell 8.
7 percent to its lowest close since Jan.
3
.
Rate-sensitive technology and growth stocks were lower, with Alphabet, Apple, Amazon, Microsoft and Tesla falling between
1.
3% and 4.
6%.
Large retailer openers reported lower margins in the fourth quarter, and the company's shares fell 4.
3%.

【Chairman of the Iranian Atomic Energy Organization to meet with Director General of the International Atomic Energy Agency】

On September 24, local time, Iran's Atomic Energy Organization Chairman Islami said in an interview with the media that he would lead a delegation to Vienna, the capital of Austria, on October 3 to attend the annual meeting
of the General Conference of the International Atomic Energy Agency.

During this period, the Iranian delegation will hold a number of talks
with international counterparts, including IAEA Director General Grossi.
"I hope these talks will work to end the prejudice
caused by political pressure and psychological warfare against Iran as soon as possible," Islami said.
”

There are many factors affecting oil prices

[U.
S.
warns Russia of 'catastrophic consequences' if it uses nuclear weapons]

The United States warned on Sunday that Russia would face "catastrophic consequences"
if it used nuclear weapons in Ukraine.
U.
S.
National Security Adviser Sullivan said the U.
S.
would respond to any Russian use of nuclear weapons against Ukraine and made clear to Moscow that it would face "catastrophic consequences.
"
Earlier, the Russian Foreign Minister said that the area where the referendum on joining Russia would be fully protected
if it joined Russia.

[Russian gas has not yet resumed supply, German chancellor visits to seek energy]

German utility RWE announced on Sunday that it had signed an agreement with the UAE's Abu Dhabi National Oil Company, which will deliver liquefied natural gas
to Germany by the end of December.
Although the initial delivery of gas was relatively small, it was a politically significant agreement
at a time when German Chancellor Scholz sought to deepen ties with the Gulf states and find alternative sources of energy.
RWE said: "This is an important milestone
in establishing a more diversified gas supply in Germany.
German officials hope the move will reduce the current surge in energy prices
at home.
In addition, UAE renewable energy company Masdar will also explore wind energy development
along the coast of Germany.

[Russia says Ukraine continues to provoke near the Zaporizhzhya nuclear power plant]

The Russian Ministry of Defense issued an announcement on September 25 that Ukraine continues to carry out provocations
near the Zaporizhzhya nuclear power plant.
According to the announcement, Ukrainian artillery shelled residential areas in the city of Energodar and areas near the nuclear power plant from the Dnipropetrovsk region, firing a total of 59 shells, one of which hit a canal
near the nuclear power plant.
The Ukrainian army also launched 8 suicide drones to try to attack the nuclear power plant area, all of which were intercepted
by the Russian army outside the nuclear power plant area.
The announcement states that the radiation situation near the Zaporizhzhya NPP is normal
.

Overall, the world's major central banks have joined the camp of raising interest rates, global economic growth concerns have entered panic mode, the strong dollar has continued to soar, and oil prices have been suppressed; But rising geopolitical tensions have supported rising oil prices, and the United States warned Russia on Sunday that it would face "catastrophic consequences" if it used nuclear weapons, making the geopolitical situation the focus of the week or helping oil prices rise
in the short term.

At 8:24 Beijing time, U.
S.
crude oil is now trading at $79.
54 a barrel
.