Off Monday's Highs As A More Cautious Risk Tone Emerges

Oil hasn't been able to build on positive momentum from Monday's session, last tracking down 0.55% for Brent to $79.20, while WTI is off by slightly less, around $74.30/bbl currently. These falls only partially unwind Monday's gains, but underscores the struggles oil has to generate meaningful upside traction at the current juncture. We remain within recent ranges for both benchmarks though.

• The broader risk tone has been a more cautious one today, with US equity futures tracking lower and the USD finding some support. This has weighed at the margins, particularly ahead of key central bank speak later.
• Optimism around China demand was bolstered further late yesterday, as the authorities issued a generous quota for crude oil imports. Still, this is not overwhelming current supply side dynamics.
• In terms of oil specific event risks in the upcoming US session, the EIA releases its short term energy outlook, while the API weekly report on oil inventories is also due.