Oil prices decline over 1% as dollar edges up

Oil futures declined over 1% in Asian trade as the dollar index rebounded from April 26 lows, ahead of US data today while analysts assess the situation in China.

As of 06:52 GMT, US crude futures due in June fell 1.55% to $108.72 a barrel, while Brent futures due in July tumbled 1.40% to $111.79 a barrel, as the dollar index rose 0.09% to 102.20.

From the US, the manufacturing  PMI is expected down to 57.6 from 59.2, while the services PMI is expected down to 55.1 from 55.6. 

US new home sales are expected down to 751 thousand, compared to an 8.6% decline in March to 763 thousand.

Fed Chair Jerome Powell will deliver pre-recorded opening remarks at the National Center for American Indian Enterprise Development Reservation Economic Summit, in Las Vegas

Chinese Economy

China is starting to loosen up restrictions on movements in major cities as Covid 19 infections decline, while China's central bank took a bold move and cut interest rates to bolster economic activities.

Shanghai, a 25 million people city, is preparing to return to normal life by June 1.

Otherwise, the People's Bank of China cut five-year interest rates for loans by 15 basis points to 4.45%, the largest such decrease since 2019.

Latest World Health Organization data showed Covid 19 infections up to 522.78 million, with the death toll at 6.276 million.

The Financial Times reported this weekend that Saudi Arabia will continue to support Russia's roles in the OPEC plus group.

Saudi authorities expressed the importance of separating politics from the OPEC + proceedings, which are meant to organize the global oil market.

The Saudi government noted that in the last three years, the world lost 4 million barrels of refining capacity, 2.7 million from the start of the Covid 19 pandemic, so it's not wise to shut Russia out now.

Baker Hughes data showed US oil rigs rose by 13 rigs last week to 576 rigs, the highest since March 2020 for the ninth straight week, with output rising 100 thousand bpd to 11.9 million bpd.

US production fell 1.2 million bpd, or 10% from a record high at 13.1 million bpd scaled on March 2020.