Crude Higher As China Cuts Rates

After falling around 3% on Friday due to demand concerns, especially from China, and the stronger USD, oil prices are moderately higher today following the PBoC cutting rates to support the economy and President Biden standing aside from the 2024 election campaign. The USD index is off its intraday low but is still down around 0.1% today.

• Brent is up 0.6% to $83.11/bbl, close to the intraday high of $83.22, while WTI is up 0.5% to $79.04/bbl after a high of $79.13. On Friday the two benchmarks fell to lows of $82.56 and $78.59 respectively.
• The PBoC unexpectedly cut the 7-day repo rate, 1-year & 5-year LPRs by 10bp today to support the economy after Q2 GDP disappointed and the Third Plenum meeting took place.
• In an interview with MNI, an energy expert said that China’s consumption and imports of oil will slow to single digit growth in 2024 from 11.5% y/y due to increased EV usage and base effects.
• Although oil prices have risen, VP Harris is seen as less supportive of the sector and may be more likely to challenge its environmental record. She sued oil companies when she was California’s attorney general and has been more critical of fracking than Biden, according to Bloomberg.
• Wildfires in Alberta Canada continue to threaten the oil sands with around 348kbd of output at risk, according to the Alberta Energy Regulator.
• There are few events today with only the US Chicago Fed June index and May German retail sales the main releases.