Crude Higher Again Today, Gains Vulnerable To Fed Comments

Oil has made further gains during the APAC session rising around 0.2% after Monday’s +2% rise, as China’s July Politburo statement buoyed risk appetite. It has been trading in narrow ranges though. Brent is around $82.93/bbl, close to the intraday high of $82.99, and off the earlier low of $82.68. WTI is $78.96 but hasn’t been able to hold breaks above $79. The USD index is 0.2% lower.

• The news from China that there would be increased support for the property market and plans to resolve local government debt issues has supported oil prices at a time when evidence is emerging of reduced OPEC+ supply. China is the world’s largest crude importer.
• Oil’s recent gains could be vulnerable to hawkish comments from Fed Chairman Powell on Wednesday (see MNI Fed Preview - July 2023 here). A 25bp hike is widely expected and so the tone of remarks re future policy will be key to oil markets. MNI expects the tightening bias and options to hike at subsequent meetings to be retained.
• Later there is US May house price data, July consumer confidence and Richmond Fed. There is also the July German Ifo survey.