Prices Stabilise After Rallying On Signs Of Market Tightening

Oil prices have been trading in a narrow range during the APAC session after rising about 0.6% on Friday on growing signs that the market is tightening. WTI is around $82.50/bbl after reaching an intraday low of $82.45 and Brent is about $86.25. Both remain above their 200-day moving averages. The USD index is 0.1% higher.

• The global diesel market is signalling a sharp slowdown in economic activity, which could put downward pressure on crude prices. It is used for heavy machinery and trucks and can be a leading indicator of growth. The number of trucks on China’s highways has fallen recently and Europe’s diesel premium has narrowed, according to Bloomberg. S&P Global says US diesel demand is likely to fall 2% this year. Distillates are also showing softer refining margins.
• Tanker data from Bloomberg showed that Russian shipments fell by 1.24mbd last week.
• There is little data scheduled for later but there are a number of central bank speakers outside of the US. ECB President Lagarde will speak, as will Buba President Nagel and BoE’s Cunliffe.