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.
Palladium climbs but remains below $2000
Palladium prices climbed today but remained below $2000 an ounce despite ongoing concerns about global supplies shortages.
Russian data indicate a global palladium shortage of 100 thousand ounces, while Nickel oversupplies are expected to hit 37 thousand tones in 2022.
Nornickel, the world's largest palldium and nickel producer, reported a drop in its output last year due to mining issues and accidents in refineries.
The company expected in February that palladium deficiency would hit 300 thousand ounces, with nickel oversupplies hitting 42 thousand tones this year.
Palladium
Palladium futures due in June rose 2.6% as of 14:28 GMT to $1,988 an ounce.
Nickel
Nickel futures rallied 6.9% to $27,925 a tone as of 14:40 GMT.
Wall Street gains solid ground
US stock indices gained ground on Monday on optimism of resuming good trade relations between China and the US.
US President Joe Biden stated that his administration might lower customs imposed on Chinese products.
Biden is aiming to increase trade relations with China after the previous trade customs war launched by Trump.
Dow Jones rose 1.3% to 31,655 as of 14:24 GMT, while S&P 500 rose 0.8% to 3,935, as NASDAQ rose 0.2% to 11,379.
Oil extends gains on strong demand in the US and China
Oil prices rose in European trade for the third straight session on hopes for improving demand on fuel in the US and China.
Prices are also buoyed by the tumble in dollar against major rivals, underpinning demand on commodities and metals.
US crude rose 1.3% to $111.91 an ounce, while Brent rose 1.4% to $114.26 a barrel.
US crude rose 0.9% on Friday, while Brent added 1.1%, the second profit in a row on hopes for rising Chinese demand.
US Demand
US demand is mounting as the driving season peaks soon, while refineries prepare for the increased consumption rates.
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.
US Dollar
The dollar index shed over 0.9% to 102.07, the lowest since April 26, after closing up 0.15% on Friday, following a 1% tumble on Thursday, the heftiest loss since March 9.
The dollar index fell 1.4% last week, the first loss in seven weeks, and the largest since late January.
Investors now don't expect the greenback to achieve further gains as all Fed rate hikes are mostly priced in already.