Prices Volatile As Waiting For Clarity

Oil prices have stabilised during the APAC session after falling over 1 percent on Friday. They are off highs reached earlier today but have been in a narrow range. WTI is 0.1% higher to $69.30/bbl, close to the intraday low of $69.13, while Brent is flat at $74.98, close to the $74.80 low. The USD index is down 0.1%. Positive US equity sentiment has failed to boost oil so far today.

• Crude markets are still concerned that central bank tightening and banking troubles will result in recession and reduced energy demand. Fed officials’ recent comments suggest that while it is too soon to gauge the fallout from banking events, for many members the focus remains on inflation and further hikes may be needed. There is still a lot of uncertainty around the growth/inflation and thus the Fed outlook and while that remains the case, oil markets are likely to remain volatile.
• JP Morgan is forecasting that Brent could fall below $60/bbl in the short-term.
• Due to strikes, Exxon Mobil has said that it will begin closing down its Gravenchon refinery in France, which accounts for 20% of the country’s refining capacity. The strikes have also impacted Nigeria, half of its April oil shipments are yet to be sold.
• The Fed’s Jefferson speaks later on monetary policy (2200 BST). ECB’s Elderson and BoE’s Bailey are also scheduled to speak. US Dallas Fed Index for March prints as well as the German IFO.