Crude Holds Onto Gains Ahead Of OPEC & EIA Monthly Reports Later Today

After Monday’s strong surge, oil prices are holding onto most of those gains and are only slightly lower during APAC trading today. WTI is down 0.1% to $77.65/bbl, off the intraday low of $77.55. Brent is 0.2% lower at $81.47/bbl after a low of $81.37. The benchmark has traded briefly above $82 yesterday. Crude is range trading ahead of key events this week. The USD index is up around 0.1%.

• There are a number of events for oil markets this week. Later today OPEC and the US EIA publish their monthly reports including the outlook with the IEA scheduled for Wednesday. Today also sees US API inventory data. Wednesday’s Fed decision will also be important as it will shape the US demand outlook for energy products.
• Crude rallied on Monday as traders bought the lows after the market flashed oversold following OPEC’s decision at the start of the month to reduce output cuts from October. Subsequent Saudi statements that the plan can be changed if needed have also supported the market. But the demand outlook remains uncertain with Saudi exports to China to be down for a third consecutive month in July and the outlook for the US driving season uncertain.
• Russia reduced its output in May but it still remains above what it has promised OPEC+, according to Bloomberg. It said at the June OPEC+ meeting it would make further efforts to achieve target.
• Later there are UK employment & wage data and US NFIB small business optimism for May. The ECB’s Lane, Buch and Elderson speak.