Crude Oil futures steadied early Tuesday in anticipation for Wednesday`s US inventories data, while geopolitical tensions at the OPEC members kept the benchmarks in check for further possible escalation.
The choppy trade continues to be the main theme right in the oil markets, where futures are trading in a range-bound as traders await new direction ahead of fresh economic fundamentals from the US economy, while stocks ended four straight losing sessions in a late rally. The Dow ended its jittery losing streak with a 0.5% gain to 16,569.
As of 03:18 a.m. ET:
- West Texas Intermediate for September delivery fell 0.13% to $98.42 a barrel on the New York Mercantile Exchange
- Brent Oil for September delivery fell 0.13% to $105.27 a barrel on the ICE Exchange in London
The futures saw little changes in Asia this morning with the fresh oil-impacting news flow apparently limited. The latest reports of turmoil in Northern Iraq at this stage hold little potential to meaningfully impact prices. This is likely to remain the case unless there is a material escalation of the conflict that threatens to disrupt production in the south.
Similarly, the probability of supply disruptions from Russia, the world’s largest energy exporter, remains low. The latest round of sanctions from the West has spared the country’s oil exports. It seems an unlikely proposition at this point that Europe would cut off its primary supplier of energy.
On Monday, Russia announced military exercises involving more than 100 jet fighters and bombers near the border with Ukraine, in a show of power as the Ukrainian army recaptured more territory from pro-Russian separatists in the east of the country.
This leaves traders to await Wednesday’s US inventories data. Recent reports have raised concerns about an oversupply in gasoline stockpiles – suggesting soft demand for the commodity. If this trend continues it could put further pressure on WTI.
Also on the economic front, factory orders will offer the final definite look at the manufacturing sector during June, while the PMI services index and ISM non-manufacturing report will offer the first anecdotal looks at the bulk of the economy during July.