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The main focus during a quiet European session was the news that The Kingdom of Saudi said it was to extend the voluntary cut of 1 mil bpd for another month to include August.
Oil prices also jumped on the back of Saudi Arabia saying that were to extends voluntary output cuts for another month, moving above the $70.00 per barrel benchmark level.
It is notable that the Kingdom of Saudi Arabia are the largest oil producer in the world and a key member of OPEC. Any news from Saudi on output moves oil price.
Russia is also saying that it will reduce oil supply by 500,000 bpd in August and that will keep a lid on supply conditions even as the oil market is expected to tighten heading into the summer.
Something worth noting is that Russia is referring to their bit as being oil export and not oil output or production. Thus the news is not as bullish as some might think.
Risk sentiment remained weak after the Caixin China General Manufacturing PMI fell to 50.5 in June 2023 from 50.9 in the prior month but above market consensus of 50.2.
The latest print was the second straight month of growth in factory activity, with output growth slowing from May’s 11-month high. Also, new orders rose at a softer pace while employment fell for the fourth month in a row.
Meantime, export sales were broadly unchanged amid a further rise in buying activity. Firms signalled little pressure on current production schedules, with backlogs of work rising slightly.
On prices, input cost fell the most since January 2016, due to lower costs for raw materials. Selling prices also declined on the back of increased market competition and efforts to boost sales.
Dr Wang Zhe, an economist at Caixin Insight Group said, “A slew of recent economic data suggests that China’s recovery has yet to find a stable footing,“
Finally, sentiment weakened to an 8-month low, amid worries over sluggish market conditions. The weak sentiment towards the market towards was also expressed in slight US dollar strength and equity softness.
