Oil Futures Lower Amid Weak Data
Crude oil futures experienced a slight decline amid Wednesday's Asian trading hours, as the market's attention shifted back to China's weak data and broader worries about the US economy. This comes just before the release of US Consumer Price Index (CPI) data later today.
China Import Data Impacts Market
The market was negatively impacted by disappointing data from China, which showed its largest import volume contraction in a year. This raises questions about the pace of the country's economic recovery after three years of pandemic restrictions. The data also revealed a significant slump in China's crude oil imports.
US Price Data Release Nears
Oil markets remained cautious ahead of the release of US consumer price data, which is anticipated to show an annual inflation rate increase of 5% in April. A higher figure could lead to calls for additional rate hikes, further unsettling the market.
US Banks Worry Market
The ongoing turbulence in US regional banks and its potential consequences for the US economy has continued to worry markets. As a result, the Energy Information Administration (EIA) has lowered its 2023 and 2024 forecasts for both WTI and Brent crude oil prices.
US Crude Inventories Rise
The American Petroleum Institute (API) released data on Tuesday indicating a 3.6 million barrel increase in US commercial crude inventories last week. However, this was partially offset by a 1.3 million barrel drop at the Cushing delivery hub. API figures also showed a rise in gasoline stocks and a draw in distillate stocks.
Forex Market Responds
The forex market is closely watching crude oil futures as weak data from China and concerns over the US economy have the potential to impact currency values. Forex traders are also monitoring the release of US CPI data, which could trigger calls for further rate hikes and influence forex markets. The forex market is sensitive to fluctuations in oil prices, as they often indicate changes in global economic conditions. Consequently, forex traders should stay vigilant and consider these developments when making trading decisions.