Crude Reverses Earlier Gains on Global Demand Concern

Crude falls back from earlier gains as weak demand concerns and strong supply from sanctioned countries still weigh on the market despite the China benchmark interest rate cut. Recent data has suggested a weaker than expected economic growth in China which is considered by many analysts as the main driver of global demand growth in the second half of this year.

• China's crude oil demand is expected to grow by 3.5% to 740mn metric tons this year, slower than previously expected according to CNPC.
• The potential for further US Fed interest rate cuts due to persistent inflation remains a downside risk to crude markets while the OPEC production cuts are providing support.
• Russian seaborne crude exports are edging down but are still 250kbpd higher than the February baseline for the pledged 500kbd production cuts.
  • Brent AUG 23 down -1.3% at 75.07$/bbl
  • WTI AUG 23 down -2.2% at 70.32$/bbl
  • Brent AUG 23-SEP 23 down -0.03$/bbl at 0$/bbl
  • Brent DEC 23-DEC 24 down -0.28$/bbl at 2.88$/bbl