OIL: Crude Lower On Renewed Hopes, China Fuel Imports Down Sharply

Oil prices are trending lower again in today’s APAC session as hopes cautiously rise that there will be a US-Iran deal that allows the Strait of Hormuz to reopen since Iran and Israel have halted tit-for-tat strikes. President Trump told reporters that talks are continuing and that US-Iran are approaching a “good deal” but Iran’s stance will be clearer in a couple of days. He said that the US blockade of Iran holds and has been more effective at getting close to an agreement rather than military strikes. 

• Brent is down 0.8% to $93.52/bbl but off the intraday low of $93.11. WTI is down 1.3% to $90.14 after breaking below $90 briefly.
• China’s May trade data showed a 29% y/y decline in crude import volumes to their lowest level since October 2017 as higher prices and scarcer supplies reduced demand. Refined petroleum import volumes were also very weak down 58.1% y/y to their lowest level since March 2002. More refined products are staying onshore as China banned all exports in March in response to fuel shortages following the onset of the Iran War.  
• The consumption of existing global oil inventories has helped to fill the hole left by the impact on oil supplies of the closure of Hormuz. Later US industry-reported stock data for crude and refined products are released.
• US weekly ADP employment, May NFIB small business optimism, April trade, May existing home sales, Canada’s April trade and Germany’s April trade & IP are released. Later ECB President Lagarde speaks.