OIL: Crude Ticks Lower Amid China Demand Growth Concern

Crude markets are trading just below previous close levels after a pull back late last week with the geopolitical risk premium easing and focus switching to the fundamental drivers of OPEC+ output policy and global demand.

• Data from China over the weekend have made oil markets wary over oil demand growth. Lending data was disappointing and CPI inflation remained low. Concern that the US could take longer than previously thought to bring down inflation also weighs on global demand growth sentiment.
• Market expectation has grown in recent weeks that existing OPEC+ output cuts could be extended into H2 although no official indications have yet been given ahead of the minister meeting on June 1. Iraq said earlier that it wouldn’t agree to deeper cuts but then later confirmed it would abide with what OPEC+ decides.
  • Brent JUL 24 down 0.2% at 82.65$/bbl
  • WTI JUN 24 down 0.2% at 78.14$/bbl
  • Brent JUL 24-AUG 24 up 0.02$/bbl at 0.45$/bbl
  • Brent DEC 24-DEC 25 up 0.01$/bbl at 4.48$/bbl
• OPEC and the IEA release monthly reports this week with updated outlooks.
• Oil prices have also under downside pressure with signs of weak fuel demand as diesel cracks are holding just above the lows from April 2023. Gasoline crack spreads have sunk to their lowest level since late February with seasonally lower US summer demand and building stocks last week.
  • US gasoline crack up 0.1$/bbl at 26.96$/bbl
  • US ULSD crack up 0$/bbl at 24.02$/bbl