Crude Continues Sell Off As Weaker Risk Appetite Weighs On Commodities

After falling around 2.5% on Friday oil prices are down again during APAC trading as softer risk appetite has weighed on commodities generally. Markets remain concerned about weaker demand from the US and China while supply remains robust. Brent is 0.4% lower at $81.27/bbl, close to the intraday low of $81.19. WTI is down 0.5% to $76.13, finding support around $76. The USD index is little changed.

• The market will be monitoring comments from International Energy Week in London for signals of what is expected going forward. OPEC will announce in early March if it will extend production cuts into Q2, which is looking likely. Goldman Sachs doesn’t expect the reductions to be eased until Q3.
• January US PCE inflation data due on Thursday will also be watched closely. If it prints high, then expectations of further delays to Fed cuts are likely to increase – a development that has been worrying oil markets.
• Bloomberg is reporting that strong travel in China over the Lunar New Year holiday has meant an increase in demand since then by local refiners.
• On Saturday a US tanker was targeted but not struck by Houthi rebels in the Gulf of Aden. The US and UK hit 18 Houthi sites in Yemen the same day.
• Later there are US new home sales for January. The ECB’s Lagarde participates in a plenary debate and BoE’s Pill and Breeden also speak.