Prices Up Slightly As Russian Cuts Balance China Demand Worries

Oil is up moderately during APAC trading following two days of sharp falls, helped by Russian intentions to reduce crude exports. WTI is up 0.4% to $74.41/bbl, just off the intraday high of $74.51. Brent is 0.3% higher at $78.75 after a high of $78.83. Crude swings today have also been impacted by moves in the greenback which is now down 0.1%.

• Oil prices are likely to remain very sensitive to demand indicators after China’s Q2 disappointed and a number of forecasters cut their growth projections. Treasury Secretary Yellen also warned of the risks to global growth and Australian Treasurer Chalmers said that China’s slowdown was “concerning”. China is the world’s largest crude importer.
• Offsetting demand concerns are expectations that the oil market will tighten in H2 2023. Russia plans to reduce Q3 2023 exports by 2.1mn tonnes in line with its announced August 500kbd cut, which should be aided by the Urals price exceeding the price cap.
• US API crude & product inventory data for last week are released later. There was a 3.03mn barrel build in the latest data according to Bloomberg.
• Later the Fed’s Barr and Gibson speak ahead of the blackout period before the July 26 meeting. US June retail sales, IP and July NAHB housing index, and Canadian June CPI print. The ECB’s Panetta speaks and updated European Commission forecasts are scheduled.