On Monday, after Chinese manufacturing, PMI data for crude oil dipped, coming in at 49.0 instead of 50.3 anticipated and a prior read of 50.2. The WTI futures contract is nearing US$ 97 while the Brent contract is hovering around US$ 103bbl.
The market is optimistic about the OPEC+ meeting however, adding to production might be difficult to achieve. According to the May data provided by the organization, the cartel is undershooting its current target by 2.7 million barrels per day.
APAC equity indices started the week steadily after Wall Street finished last week on a positive note. Hang Seng was underperforming after Alibaba was added to a list of companies that face potential de-listing from US exchanges.
Elsewhere, former US Treasury Secretary Larry Summers ridiculed the prospect that the Fed funds rate of 2.5% is neutral when inflation is 9.1%. Fed Chair Powell said that the rate was neutral last week.
The perception that Powell pivoted post- FOMC last Wednesday led to an equity rally that saw corporate bond spreads narrow. This is essentially an easing of monetary conditions, the opposite of what the Fed is trying to achieve at the moment.
The Japanese Yen is the best performing currency on Monday, and the Kiwi has also seen some gains while other currencies are mostly unchanged.
Gold was steady near US$ 1,760 after a 2.26% rally last week, but it slid 2.32% for the month of July.
After a series of European PMIs, US ISM manufacturing data will be the focus.
WTI crude oil made a three-week high on Friday but has dwindled to normal levels. That high and a previous peak might offer resistance at 101.88 and 100.99, respectively.
The price has not closed above the 21-day SMA since mid-June, and a close above it might indicate a resumption of bullish momentum.
On the downside, support may lie at the 200-day SMA, currently at 94.45. Further down, the prior lows of 92.93, 90.56, and 90.06 could also provide support. The latter is the lowest WTI has traded at since the outbreak of the Ukraine war.