Crude Falls As Risk Sentiment Declines

Oil prices continued to trade lower during the APAC session as risk appetite deteriorated and the market focuses on Thursday’s delayed OPEC+ meeting. After falling around 2% on Friday, crude is down around a percent today with Brent falling below $80 and is currently around $79.82/bbl and WTI below $75 to $74.73. The USD index is flat.

• Softer-than-expected industrial profits in China pointed to demand continuing to struggle there and as a result the data weighed on equities and commodities.
• The OPEC+ meeting was delayed from Sunday to Thursday due to a dispute over output quotas. A Bloomberg survey showed that about half of analysts believe that measures to reduce supply further will be announced following the meeting.
• The IEA expects that there will be a crude surplus in 2024. The increase in non-OPEC production and some countries being flexible around their quotas make the task of tightening the market more difficult. Futures contracts are in a bearish pattern.
• Shipping risks in the Middle East remain high with reports of a chemical tanker being boarded by Houthi rebels yesterday.
• Later US new home sales and Dallas Fed index are released. ECB President Lagarde makes introductory comments at the European Parliament.