Crude Consolidates Ahead Of US CPI Data

Oil prices have stopped their slide during the APAC session ahead of the US CPI May data later, helped by lower US yields, USD index and the surprise cut in the PBoC’s 7-day repo rate. Brent is 0.7% higher to $72.31/bbl, close to the intraday high of $72.39, and WTI +0.5% to $67.45, following a high of $67.53.

• Crude markets continue to worry about the demand outlook but today seem to be hoping that US inflation will moderate and that the Fed will pause (see MNI’s Fed Preview here). Continued robust Russian supply and futures spreads signalling plentiful output have also weighed on prices. The market has looked through Saudi Arabia’s latest production cut scheduled for July.
• Later today the focus is on US May CPI (see MNI’s US CPI Preview here), which could impact the Fed outcome, and the headline is expected to ease to 4.1% and core to 5.2%. There is also API crude and product inventory data. NFIB small business optimism and real earnings for May are released. In the UK, labour market/wages data print.