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The preliminary reading of the S&P Global Manufacturing PMI for June in the United States was 55.7, below the expected 54.8 and the previous reading of 55.1.The preliminary reading of the S&P Global Services PMI for June in the United States was 51.3, in line with expectations of 51 and the previous reading of 50.7.Bank of England board member Taylor: The Bank of England must guard against "short-term bias" and avoid repeating past mistakes.June 23 – Russia faces fierce competition to sell oil to its main customer, India, after US sanctions waivers allowed rival Iran to export its oil, but its oil exports still reached their highest level this year. According to tanker shipping data compiled by Bloomberg, Russias average crude oil exports in the four weeks ending June 21 were 3.89 million barrels per day, a slight increase from the previous week. The increase in crude oil exports comes amid continued attacks by Ukraine on Russian refineries, which could lead to unprocessed crude being exported. Iranian oil supplies (some of which are good alternatives to Russian Urals crude) are flooding the market as US-blocked ships are allowed to leave. During the closure of the Strait of Hormuz, Russia used US sanctions waivers to find a ready market for its increased exports, particularly benefiting Indian processors. However, the latest sanctions waivers for Russia expired on June 17, and if not renewed, processors may turn to other sources.The preliminary readings of the S&P Global Manufacturing and Services PMI for June in the United States will be released in ten minutes.

WTI crude oil drifts above $80.00 amidst a US Dollar rebound and supply shortage concerns

Alina Haynes

Apr 10, 2023 14:16

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In the early hours of Monday, purchasers of WTI crude oil struggled to maintain the price above $80.70 as risk aversion and hawkish Fed forecasts bolstered the US Dollar. However, threats to Oil supplies, primarily emanating from China and OPEC+, appear to keep purchasers of black gold optimistic.

 

US Dollar Index (DXY) reverses a four-day downtrend near 102.25 despite the inability of US Treasury bond yields to recover due to recession concerns. However, US 10-year and 2-year Treasury bond yields remain under pressure near 3.37 percent and 3.95 percent, respectively. In doing so, the benchmark bond coupons extend the previous day's losses and illustrate the market's flight to protection in response to concerns of an economic decline.

 

In spite of this, the recent disappointing US data reignite concerns of a recession in the world's largest economy and challenge the optimists in the energy sector. However, the positive US Nonfarm Payrolls (NFP) data enabled Fed hawks to return to the table and renew demands for a 0.25 percentage point rate hike in May. The same constrains the value of the US dollar and stimulates demand for WTI crude oil.

 

On the other hand, geopolitical concerns surrounding China, particularly after the dragon nation's military exercises near Taiwan, combine with last week's unexpected OPEC+ production cut to keep Oil purchasers optimistic.

 

China's willingness to defend the global economy through robust monetary and fiscal easing at home also enables Oil purchasers to maintain optimism in the face of optimism among the world's largest Oil consumers.

 

The Easter Monday holiday in spot markets may limit Oil price movements, but the investors appear to be out of steam, so US inflation and Fed Minutes will be closely monitored for signs of a pullback.


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