Crude Range Trading Driven By Soft Risk Sentiment

Oil prices haven’ recovered from Wednesday’s 2% loss and have been range trading during the APAC session, as risk appetite remains soft given higher US yields. They have found some support from the record drop in US crude inventories reported yesterday. The USD index is slightly higher.

• WTI is up 0.1% to $79.54/bbl, close to the intraday low of $79.48. It approached $80 making a high of $79.96 but couldn’t break through. Brent is also 0.1% higher and trading around $83.26, close to the low of $83.23. It made a high of $83.68 earlier. Prices could rebound on tightening supply given that Wednesday’s pullback was driven by a broad deterioration in risk appetite.
• The OPEC+ Joint Ministerial Monitoring Committee is going to hold a virtual meeting on Friday to assess the impact of output cuts.
• Later the Fed’s Bostic speaks on the economy and there is preliminary Q2 productivity/ULC, jobless claims, July services PMI/ISM, and final June durable goods orders. The Bank of England is expected to hike 25bp. ECB’s Panetta speaks on disinflation and European July services PMIs print. The focus for crude is Friday’s US July payrolls.