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Crude Down During APAC Trading As Demand Worries Dominate

OIL

Oil prices have unwound all of Friday’s gains and are down over 1% during the APAC session. WTI is 1.2% lower to $77.02/bbl and Brent -1.0% to $80.82. The USD index is up 0.1%.

  • WTI is trading around its intraday low of $76.98. The high was $77.99 earlier. It is holding above its simple 50-day moving average of $76.54 but has just broken through the 100-day moving average of $77.05. Brent is also around its intraday low of $80.75. The high earlier was at $81.87. It is now below its key simple moving averages. Oil prices fell over 5% last week.
  • Demand worries drove oil during APAC trading, as Asian refiners threaten to reduce output as margins shrink and US recession concerns persist. But China’s Golden Week holiday starts on the weekend and could boost demand for plane fuel.
  • Bloomberg is reporting that Russian refineries have cut output for maintenance and because of official cutbacks.
  • The German Ifo survey for April is released later today and also the US Chicago and Dallas Fed Indices. The upbeat April US PMIs on Friday boosted crude and so good reads from the Fed indices today could also be signalling better demand conditions. This week there will be important data for the US growth outlook and May 3 Fed decision, including Q1 GDP and March core PCE prices.

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