Market Demand Worries Outweigh Output Cuts

Oil prices are marginally lower during APAC trading today, as demand worries came to the fore again, but are off their intraday low. Crude is finding some support from mixed US inventory data. The USD has been trending down and is around 0.1% lower, which hasn’t boosted oil prices.

• Crude has been moving in a narrow range. Brent is down 0.3% to around $76.72/bbl, off the low of $76.61. It reached an intraday high of $77 earlier. WTI is also 0.3% lower at $72.34 following a low of $72.23 and a high of $72.61.
• A large increase in US refinery utilisation to the highest since August 2019 drove an unexpected drawdown in US crude inventories. But they remain below the 5-year seasonal average. Refiners are expecting strong demand through the summer. The DOE reported a 1.6% increase in US oil production to a 3-year high.
• The calendar is light over the rest of today with US jobless claims the main release. The ECB has a public holiday, and the Fed is in the blackout period ahead of the June 14 meeting.