Crude Slightly Higher On Geopolitical & Hurricane Concerns

Oil prices are moderately higher during APAC trading today with WTI up 0.2% to $83.56/bbl after an intraday high of $83.61 and Brent is 0.3% higher at $86.84/bbl after rising to $86.89. Crude continues to be supported by geopolitical uncertainties and the early start of the hurricane season in the Atlantic. Benchmarks broke resistance levels on Monday. The USD index is 0.1% higher.

• Prompt spreads are indicating that the oil market is tight but the demand outlook remains uncertain with a US refinery reducing output due to soft demand while China’s Caixin manufacturing PMI came in more optimistic than the official PMI. The industry-based US API inventory data is released today. Travel developments for this week’s Independence Day holiday will be monitored closely.
• Venezuelan president Maduro said today that talks with the US will resume on Wednesday after the latter reintroduced sanctions on the country’s oil and gas in April as it didn’t meet fair election criteria. Elections will be held this month.
• Later the Fed’s Goolsbee appears and Fed’s Powell, ECB’s Lagarde and BCB’s Campos Neto speak in Sintra. Also the ECB’s Schnabel, de Guindos and Elderson talk. In terms of data, there are May US JOLTS job openings and preliminary June euro area CPI.