Steady Ahead Of FOMC

Brent Crude is holding above $121.00, barely changed on the day, following the sharp dip through NY trading overnight. WTI is close to $119, also little changed on the day.

• Market sentiment still remains a little nervous following overnight reports the US may consider taxing the profits on energy companies. US gasoline prices continue to push higher in the US, raising political pressure around the issue.
• Gasoline inventories reportedly fell by 2.16 barrels in the US last week, while crude stockpiles rose nationally by 736k barrels but fell at the Cushing hub.
• China data was better than expected, with IP moving back into expansion territory (+0.7%, versus -2.9% previously), while retail spending fell by less than expected. China electricity production was -3.3%, versus -4.3% in April. Crude oil processed was still -10.9% in YoY, a slight deterioration from the previous month's -10.5% reading.
• The data didn't impact oil sentiment to any great extent though.
• A slowing global backdrop is expected to cool global oil demand, according to OPEC. The organization is forecasting world oil consumption to rise 1.8mln barrels a day next year, down from the 3.4mln projected this year.