Oil futures: Brent higher as Saudi pledges to do 'whatever necessary'
Quantum Commodity Intelligence – Crude oil futures Wednesday nudged higher, although prices continued to see-saw as markets again faced conflicting signals from possible supply constraints versus a weakening economic outlook.
Sep23 ICE Brent futures were trading at $76.71/b (1845 GMT), compared to the day's range of $75.30-$76.88/b and Tuesday's settle of $76.25/b.
At the same time, Aug23 NYMEX WTI was trading $71.92/b versus Monday's close of $69.79/b. There was no WTI settlement the previous session due to a public holiday in the US.
Prices had been given a lift since Monday's coordinated announcements from Saudi and Russia pledging to cut an additional 1 million and 500,000 bpd in August, respectively, but the market response so far is likely to be viewed as disappointing by OPEC producers.
Investors were following comments from the OPEC seminar taking place in Vienna, as Saudi Arabia's Energy Minister said that OPEC+ cooperation remains strong, while the alliance will do "whatever necessary" to support the market.
China
Meanwhile, China's services activity expanded at the slowest pace in five months in June, according to a private-sector survey published Wednesday, as weakening demand weighed on post-pandemic recovery momentum.
The Caixin/S&P Global services purchasing managers' index (PMI) softened to 53.9 in June from 57.1 in May, the lowest reading since January when the country had only recently lifted Covid curbs. The 50-point mark separates expansion from contraction. The data broadly tracked the government's official PMI released last week.
Later Wednesday, US markets get a look at the most recent Fed minutes, when the FOMC took the collective decision to keep rates on hold, while the likelihood of a resumption in rate hikes later this month is increasingly priced in.
"As we look ahead to Friday's US payrolls report, speculation abounds as to how many more central bank rate hikes are inbound in the coming weeks, against a backdrop of economic data that by and large continues to remain reasonably resilient, manufacturing notwithstanding," said Michael Hewson, chief market analyst at CMC.
