Despite the slight morning gains, crude oil is seen steady below the $94.00 a barrel, as investors await key data from the U.S. and China this week to provide signs on the outlook for global oil demand growth.
Data released later this week include the U.S. home prices, consumer confidence and the first quarter growth figures. China will release the official manufacturing PMI. In Europe, Germany will release its employment numbers.
“Oil markets appear to be more interested in broader economic signals in the U.S. and China for a view on demand”, said ANZ analysts.
- Crude is trading around $93.86 a barrel, with the highest at $94.00, and the lowest at $93.51
- Brent is trading around $102.59 a barrel as of this writing after falling 0.03%, or $0.03
The contraction in China’s factory activity for May, the rise in U.S. gasoline inventories and slowing manufacturing activity in the U.S. have been weighing on oil prices since last week, and it darkened the outlook for oil demand.
But as the global economy is looking stable and the Feds are not expected to stop the quantitative easing program this year, the dollar’s gains, mainly against the yen and the euro may weaken, giving support to oil prices.
Oil tends to move inversely against the dollar as it reduces the appeal of dollar dominated commodities.
The start of the summer driving season in world’s top oil consumer the United States may also support prices. “The demand season has started in the U.S. and I think we can say oil prices may have bottomed out”, Emori added.
Traders will also shift their focus to a meeting of the Organization of Petroleum Exporting Countries in Vienna on Friday. The producer cartel is expected to keep its supply target unchanged at 30 million barrels a day as current prices are seen “suitable and fair”.
- Natural gas is trading at $4.262 per cubic feet after rising 0.59%
- Gasoline is trading at $2.8288 a gallon after falling 0.36%
- Heating oil is trading at $2.8664 a gallon after rising 0.33%