Expectations for a rate hike are on the rise. Goldman says physical market is 'screaming’ of supply shortage

Brent    oil price chart at intervals of 1 day

Brent crude fell after impressive US inflation data reinforced expectations that the Federal Reserve will continue to aggressively raise interest rates.

Global benchmark crude fell 2.4%, hitting its lowest level since March, while West Texas Intermediate also fell. On Thursday, markets were broadly weaker as the dollar resumed gains, weakening commodities priced in the US currency. Traders switched to expecting a historic one percentage point increase in the Fed’s interest rate later this month.

However, calendar spreads signal a shortage of supply, and Goldman Sachs Group Inc. stated that the market is „screaming” about the deficit. The bank said the week’s big sell-off was driven by low liquidity and technical factors, with the price of Brent oil down more than 20% from its June high.

US Gasoline Demand Falls in Midsummer

President Joe Biden arrived in the Middle East on Wednesday, just as a report showed that inflation jumped to a 40-year high last month, reflecting higher spending, including gasoline, which are a central issue in US elections. High U.S. gasoline prices may be starting to take a toll on consumption, with demand falling to its lowest level this time of year since 1996 last week.