Crude oil futures were stable to slightly lower in mid-morning Asian trade July 27 as recession fears returned to the fore after fresh US data overnight showed weakening consumer confidence in the economy.
At 10:18 am Singapore time (0218 GMT), the ICE September Brent futures contract was down 23 cents/b (0.22%) from the previous close at $104.17/b, while the NYMEX September light sweet crude contract was unchanged at $94.98/b.
A rally in the early July 27 Asian session failed to make any meaningful gains, with prices turning lower after data showed US consumer confidence sliding for the third straight month in July, data from the Conference Board showed.
“Consumer spending outlook was clearly being put into question, with some signs of a pullback in discretionary spending serving as the tradeoff for high inflationary pressures,” IG market strategist Yeap Jun Rong said in a July 27 note. “A second straight month of underperformance in US consumer confidence data (95.7 versus 97.2 forecast) added to the cloudy outlook.”
Oil prices are likely to trade in a wide range in the near-term as investors continue to weigh a tight physical oil market against deteriorating macroeconomic conditions. The front-month ICE Brent crude contract has mostly been trading in the range of $98-$108/b since early July.
“Even though bullish sentiment is creeping back into the overall narrative as traders feel the latest selloff is overdone, the stronger US dollar and concerns about weaker global demand continue to weigh on the oil market’s top-side ambitions,” SPI Asset Management Managing Partner Stephen Innes said.
Trading volumes are expected to remain muted for the day as investors await the US Federal Reserve’s decision on interest rates due later July 27.
Dubai crude swaps and intermonth spreads were lower in mid-morning trade in Asia July 27 from the previous close.
The September Dubai swap was pegged at $93.40/b at 10 am Singapore time (0200 GMT), down $2.46/b (2.57%) from the July 26 Asian market close.
The August-September Dubai swap intermonth spread was pegged at $3.78/b at 10 am, down 10 cents/b over the same period, and the September-October intermonth spread was pegged at $2.69/b, down 7 cents/b.
The September Brent/Dubai EFS was pegged at $10.73/b, down 19 cents/b.
Source: Spglobal.com
