By Dat Tong, Senior Financial Markets Strategist at Exness
Crude oil opened the week to the upside, following intensified Ukrainian attacks on Russian infrastructure. However, the upside in crude prices is tempered by US Vice President JD Vance’s remark that Russia had made “significant concessions” toward a negotiated settlement with Ukraine. Positive developments could provide some balance, limiting the risk premium on crude and capping any significant upside.
Meanwhile, China’s Sinopec reported a sharp profit drop last week, citing weak fuel consumption. The trend of subdued fuel demand is expected to persist, influenced by factors such as lower consumer confidence, rising electric vehicle adoption, improved fuel efficiency, and ongoing trade tensions, all of which are reducing petroleum demand in China. Slower economic growth could further weigh on the market, keeping crude prices vulnerable.
Looking ahead, market participants await inventory data in the coming days for the week ending August 22, which could set the tone for crude prices. A further draw in US nationwide crude stocks could support prices, while a surprise build could weigh on the market.