Crude Lower As Awaits Key Events & China PMIs Disappoint

Oil prices are down during APAC trading following a close to 2% rise on Tuesday, as the market is awaiting key events later and China’s June PMI data showed growth slowed more than expected. WTI is down 0.6% to $70.87/bbl, off the intraday low of $70.78. It reached a high earlier of $71.20. Brent is also 0.6% lower at $75.77, close to the low of $75.72, and off the high of $76.15. The USD index is 0.1% higher.

• The announcement of supply cuts for August supported oil on Tuesday but demand worries are never too far away and PMI data from China provided further evidence that growth may disappoint.
• There are signs of market tightening with the Brent spread between two nearest futures contract returning to backwardation, which is bullish.
• Saudi energy minister Prince bin Salman is scheduled to speak on Wednesday at the 8^th OPEC International Seminar. In June he said he would do “whatever is necessary” to steady prices. The market will watch his comments closely given recent moves. Official Saudi Aramco selling prices are also published this week. Weekly US API crude/fuel inventory data are released today.
• Later the FOMC June meeting minutes are published and the Fed’s Williams speaks. European/UK services/composite PMIs for June and May US factory orders print.