Oil futures: Crude steadies at lower levels, Brent around $84/b
Quantum Commodity Intelligence – Crude oil futures Tuesday were slightly lower as oil benchmarks consolidated at the week's lower levels, with concerns over China's economy continuing to weigh on the commodities sector.
Front-month Oct23 ICE Brent futures were trading at $84.07/b (1745 GMT), compared to the day's low of $83.85/b and Monday's settle of $84.46/b.
At the same time Oct23 NYMEX WTI was trading $79.75/b versus Monday's settle of $80.12/b. The Sep23 contract was trading at $80.55/b heading into expiry.
Markets have come under pressure again this week on fears of contagion in the debt-ridden Chinese property sector, which has also threatened to spill over into banking.
"The primary and most notable source of downside risk in the economy continues to reside within the property sector. In July, there was a substantial 63% decrease in new housing starts compared to their levels in 2019, accompanied by a 34% decline in property sales," said Stephen Innes, managing partner SPI Asset Management.
Attempts to boost market confidence have so far fallen short, with markets left underwhelmed after China trimmed one of its key rates by just 10 basis points at the start of the week.
Jackson Hole
The US and global economies also come under scrutiny later this week as the world's top central bankers gather for the Federal Reserve's closely-watched Annual Economic Symposium in Jackson Hole.
It comes after minutes from the FOMC's July Monetary Policy Meeting revealed that most Fed officials continue to see "significant upside risks to inflation," although sentiment has improved on the broader US economy.
"After an era of relentless inflation and worries that the US central banks most aggressive interest rate hiking campaign ever seen would end up tanking economies – there are signs that a recession can be avoided, for this year at least," said Phil Carr of the Gold & Silver Club.
Oil prices continued to find some support from expected solid demand heading into the northern hemisphere winter, while a preliminary Reuters poll expects US crude and gasoline inventories to have fallen last week, with API date scheduled later Tuesday and the EIA inventory report on Wednesday.
Meanwhile, a weather front heading for the Corpus Christi refining and crude export hub has been upgraded to Tropical Storm Harold Tuesday, although any risk to the energy infrastructure is likely to come from flooding rather than wind speeds.
