Oil and other commodities fall amid weak economic data in China - 31.5.2023

On Tuesday, the US dollar index fell slightly. There was no particular negative. The U.S. The Conference Board Consumer Confidence Index fell less than expected in May to 102.3 points. Federal Reserve Bank of Cleveland President Loretta Mester expressed an opinion about the possibility of raising the Fed's rate. This morning, the US dollar index resumed its growth but has not yet updated yesterday's high. Japan Retail Sales, China Manufacturing Purchasing Managers Index (PMI), Switzerland Retail Sales, and New Zealand ANZ Business Confidence were released this morning. All four economic indicators were worse than expected. This contributed to the weakening of the currencies of the respective countries.

Bitcoin quotes have been in a trading range for 10 weeks with approximate borders of $30,500-26,500. Today they are slightly declining in the absence of significant news.

Yesterday, the American stock index Dow Jones decreased, while Nasdaq increased. This was due to a decline in the stock prices of oil and gas companies such as EQT Corporation (-2.8%), APA Corporation (-3.5%), and Devon Energy Corporation (-2.3%). The sectoral index DJ Oil&Gas (-0.9%) became the leader in the decline. The rise of Nasdaq was supported by a 3% increase in NVIDIA Corporation shares due to strong financial performance. Tesla's quotes rose by 4.1% following its owner Elon Musk's visit to China. Today, the U.S. House of Representatives Rules Committee will continue discussing the extension of the debt ceiling limit (debt ceiling bill). Additionally, economic data on United States JOLTS Job Openings and the Federal Reserve System Beige Book will be released. Futures on American stock indexes are currently declining as a possible interest rate hike (5.25%) could increase corporate debt burden.

On Tuesday, oil prices fell noticeably. Investors hope that OPEC+ will not cut production at the June 4 meeting. In addition, the increase in the Fed rate may contribute to a decrease in demand. This morning, China Manufacturing PMI for May was worse than expected and amounted to 48.8 points. This could be a sign of declining oil demand in China. Recall that in April, OPEC + announced plans to reduce production by 1.2 million bpd.

The poor China Manufacturing Purchasing Managers Index for May caused a fall in grain futures and some other Commodities.

Natural gas in Europe on ICE Dutch TTF traded for the 4th day at about $270 per 1000 cubic meters. US gas quotes on Henry Hub fell below $2.3 mmBtu. April's low and their strong support level is $2. Europe's gas storage facilities are now 68% full. This is well above the average occupancy rate of 50% for the current period of the year. In the US, gas reserves in storage are 17% above the 5-year average.