Crude Steady, EIA US Inventory Data Out Later

Oil prices are little changed during APAC trading today after falling for the last few days after OPEC decided on the weekend to reduce output cuts from October, which was earlier than expected. Higher US stockpiles have not put further downward pressure on crude today. WTI is around $73.21/bbl after a high of $73.34 and Brent is $77.52/bbl after reaching $77.64 and both benchmarks are down around 5% this week. The USD index is slightly higher.

• Oil prices are likely to face headwinds through 2024 as demand from China is looking soft and the Fed may not cut rates until year end pressuring US demand. There is also strong supply from non-OPEC countries and increased output from OPEC+ in Q4 will add to that, but the group may change its plan to reduce production cuts if prices look weak.
• Bloomberg reported a 4.1mn barrels crude inventory build in the US compared with a 6.5mn drawdown the previous week according to people familiar with the API data. Gasoline rose 4.0mn barrels and distillate 2mn. The official EIA data is released later today.
• Later US May ADP employment, final May US & European composite/services PMIs/ISM, euro area April PPI and the Bank of Canada decision are released. The focus for the oil market now the OPEC meeting is behind it will be Friday’s US May payrolls and the June 12 Fed decision.