Traders Weigh Concerns of a Global Economic Slowdown Against Hopes of Rising Fuel Demand in China
The energy sector is pointing to a mixed to higher start, backed by moderate strength in the crude complex but pressured by weakness in the major equity futures which fell as investors digest an underwhelming start to earnings season and more signs that the U.S. economy is slowing.
WTI and Brent crude oil futures steadied this morning as traders weighed concerns about a global economic slowdown and expected build in U.S. oil inventories against hopes of rising fuel demand in China. Analyst expect the next round of inventory data to show crude oil and gasoline stock to have risen last week while distillate stocks were forecast to fall. JP Morgan raised its forecast for Chinese crude demand but maintained its projection for a 2023 price average of $90 a barrel for Brent crude. The dollar, meanwhile, hovered near a nine-month low against the euro and gave back recent gains against the yen as traders continued to gauge the risks of U.S. recession and the path for Federal Reserve policy.
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