Oil futures: Brent eases below $76/b on slowdown fears

Quantum Commodity Intelligence – Crude oil futures Tuesday were lower as concerns over economic slowdown and further rate rises continued to dampen market outlook, while a small cut in China's rates provided only brief support.

Aug23 ICE Brent futures were trading at $75.85/b (1845 GMT), compared to the day's range of $74.51-$77.15/b and Monday's settle of $76.09/b.

At the same time, Aug23 NYMEX WTI was trading $71.15/b, versus Monday's close of $71.93/b, while the Jul23 contract was trading $70.50/b heading towards expiry. 

"The economic outlook has been a major factor behind its slide this year and some improvements on that side could turn things around for it. The problem is that no major central bank has yet ended its tightening cycle and a number of more rate hikes could still be on the cards. Even those that had previously declared a pause have restarted," said Craig Erlam, senior market analyst at OANDA.

The next few days will see a further rash of indicators from the US, Asia and Europe.

"This week is all about Global Monetary Policy with trader's attention firmly focused on the outcome of Fed Chairman Jerome Powell's testimony, the Bank of England's interest rate decisions, along with details of trillions in new economic stimulus spending from the People's Bank of China," Phil Carr of the Gold & Silver Club said.

China made the first move, as its central bank on Tuesday trimmed two key benchmark interest rates by a modest 10 basis points, which followed liquidity measures introduced last week.

Meanwhile, the National Hurricane Center is monitoring two areas in the Atlantic this week, of which Tropical Storm Bret is expected to become a hurricane by Wednesday, while a third disturbance has just left the West African coast.

While a June storm is unlikely to impact on the oil and gas industry, it could be a precursor for elevated storm activity during the peak July to September season, with weather watchers already reporting unusually warm Atlantic temperatures.

Only sixteen June hurricanes have been recorded since 1950, with the most recent being Elsa in 2021.