Chinese and US Economic Data Weighs on Oil Markets Monday

Oil prices have retreated on Monday after rising nearly 5% last week due to upward momentum from Saudi and Russia pledging further supply cuts.

• Demand remains a concern, especially from top consumers like the US and China. US Treasury Secretary Janet Yellen said on Sunday that a US recession is “not completely off the table”.
• Reuters sources last week said Russia does not plan to deepen crude production to fulfil its pledge to reduce its August crude exports by 500kbpd. Instead pledges by Saudi of 1mn bpd production cuts this month and next remains the more powerful upward driver of late for prices with market confidence the levels will be met.
• China’s consumer inflation rate was flat in June while factory-gate prices fell further, underlining continued weakness in demand.
• Brent SEP 23 down -0.7% at 77.94$/bbl
• WTI AUG 23 down -0.7% at 73.33$/bbl
• Gasoil JUL 23 up 0.4% at 746.75$/mt
• WTI-Brent down -0.03$/bbl at -4.68$/bbl
• US CPI and a range of Chinese economic data releases this week will keep markets cautious of signs of demand weakness while the weight of further Fed rate rises after data Friday showed strong wage growth making a rise more likely.
• Chinese flying activity is flashing stronger figures as international travel from the country shows further recovery in July as peak summer travel takes place.
• EIA data last week showed US crude oil stocks declined by 1.5mbbls the week prior - roughly in line with expectations following the big draw the previous week as the market watches for signs of tightening supplies into the second half of the year.
• Brent SEP 23-OCT 23 unchanged at 0.39$/bbl
• Brent DEC 23-DEC 24 down -0.1$/bbl at 3.76$/bbl
• US cracks performed better last week helped by higher levels of implied demand as the summer driving season ticks into a higher gear and further supported by tighter gasoline and distillate stocks.
• US 321 crack down -0.1$/bbl at 34.46$/bbl
• US gasoline crack down -0.2$/bbl at 34.81$/bbl