Crude Struggling Amid Demand Fears

Oil prices continued to fall on Monday as the demand outlook remained a concern with fears of a US recession and a collapse in demand from China. The USD index finished flat.

• WTI traded most of Monday below $70 and finished down 4% and is currently trading around $67.38/bbl, close to the intraday low of $66.80. It reached a high of $70.33 during earlier APAC trading. It broke support of $67.03 which has opened up $63.90, the May 4 low. Brent fell 3.6% to $72.12 after breaking through $72 to an intraday low of $71.58. Having breached $73.58, the next level to watch is $71.50, the May 31 low.
• Markets appear to be looking through the latest OPEC output cut and wildfires in Canada, to focus on demand jitters. Goldman Sachs revised down its end-2023 Brent forecast by $9 to $86/bbl.
• US sour crude prices are their strongest in a year on the back of the announcement that the SPR will be refilled, according to Bloomberg. It is trading at around a 33c premium to WTI. Sour has been not only boosted by this but also the issues at Turkey’s Ceyhan port, the fires in Canada, Saudi output cuts and the start of the US driving season.