This post was originally published on this site.Tomorrow’s U.S. CPI report is the next big test for the markets. Will inflation remain concentrated in energy, or will the data show price pressures spreading more broadly? That question took on added importance after Susan Collins, president of the Boston Fed, reiterated her support for another rate hike before year-end. Tuesday’s market moves were mixed. The dollar gave back ground against all the major currencies, longer-term Treasury yields moved lower, and stocks were modestly lower after a volatile session. Oil continued higher as Middle East tensions kept supply and shipping risks in...

This post was originally published on this site.The freight argument points to Brent holding a firmer premium over long-haul grades, including WTI delivered into Europe, for as long as shipping stays expensive. Refiners in Northwest Europe benefit from cheaper delivered barrels from Brazil, West Africa and the US, while producers of those grades absorb the cost through weaker differentials. The main risk to the call is a sustained fall in freight rates, for example from a durable normalisation of Hormuz traffic, which would remove the Brent-specific support even if overall supply stays tight. Traders should watch tanker rates and physical...