Oil News: Bearish API Data Weighs on Outlook as EIA Inventory Report Takes Focus

Commodity

Summary:

Oil prices fell as a surprise U.S. crude inventory build and failure to break key resistance fueled bearish sentiment. Traders await EIA and OPEC reports for fresh direction amid profit-taking.

Crude Oil Slides as Technical Rejection and Inventory Build Weigh on Sentiment

Oil News: Bearish API Data Weighs on Outlook as EIA Inventory Report Takes Focus_1

Daily Light Crude Oil Futures

Light crude oil futures are under pressure Wednesday, slipping after a failed test of the 50-day moving average at $63.80. With prices trading below the key pivot level of $63.06, the intraday bias has shifted bearish, prompting traders to watch for a potential drop toward the next minor pivot at $59.60.

API Report Fuels Bearish Sentiment Ahead of EIA Data

Traders reacted to American Petroleum Institute (API) data showing a surprise 4.3 million barrel build in U.S. crude inventories for the week ended May 9. The uptick added selling pressure, countering the broader rally seen earlier this week. While gasoline and distillate stocks showed significant draws—down 1.4 million and 3.7 million barrels respectively—the headline crude build dominated early sentiment.

Market attention now shifts to official inventory figures from the U.S. Energy Information Administration, due later Wednesday. A Reuters poll suggests crude and gasoline stocksgasoline stocks likely declined, but expectations of a distillate build could temper bullish interpretations. With the summer driving season approaching, product demand trends will be critical for gauging supply tightness.

Product Draws Hint at Underlying Support, But Profit-Taking Kicks In

Despite the bearish tilt from the crude stock build, analysts noted that large draws in refined products signal supply tightness in the oil complex. Roth Capital Markets pointed to the product declines as evidence of an undersupplied market, potentially offering longer-term support for prices.

Still, the recent rally in crude benchmarks to two-week highs has prompted profit-taking. UBS analyst Giovanni Staunovo highlighted this factor, noting that traders may be unwinding positions after recent strength in oil prices.

OPEC Report in Focus as Supply Signals Take Center Stage

Market participants are also awaiting OPEC’s monthly report, expected later Wednesday. Analysts are focused on secondary source data for supply estimates, which could offer fresh insight into how disciplined production cuts are holding across member states.

With prices failing to push past the 50-day moving average and supply data offering mixed signals, bulls appear hesitant to commit. A sustained break above $63.80 could revive upside momentum toward the 200-day moving average at $67.58, but that scenario requires a meaningful bullish catalyst—potentially from EIA data or OPEC figures.

Bearish Bias Sets In as Market Rejects Technical Resistance

With WTI crude unable to hold above key resistance and a surprise build in inventories pressuring sentiment, the short-term oil prices forecast leans bearish. Unless official EIA data delivers a sharp crude draw or OPEC signals deeper discipline, downside momentum could extend toward $59.60.

Source:fxempire

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Gerik

China–U.S. Trade War

Economic

US CPI Data Shows Modest Increase in April

The US Consumer Price Index (CPI) increased modestly in April, with a 0.2% rise compared to March. This increase was lower than economists' expectations of a 0.3% rise. Annual inflation stood at 2.3%, the lowest level since February 2021, reflecting a cooling off in price growth, partly due to declining food prices.

Despite the relatively low increase in CPI, experts caution that the full impact of President Trump's broad trade tariffs on imported goods has not yet fully materialized. With tariffs still in place on many imports, including a 10% tariff on goods from China, analysts predict that the effects on consumer prices will become clearer in the latter half of 2025. For now, the Federal Reserve appears poised to maintain its interest rate policies, with expectations of gradual rate cuts later in the year.

Impact of Tariffs and the Fed’s Response

The April CPI data shows that inflationary pressures are beginning to ease, but concerns about future tariff impacts persist. The Trump administration has implemented high tariffs on imports, including a 20% tariff on fentanyl-related goods from China and 25% on cars and light trucks. Despite this, economists note that the effect on inflation has been limited so far, with tariffs scheduled to be fully imposed by mid-2025.

The Federal Reserve remains cautious in its policy, waiting for clearer signals on the economic impact of these tariffs. Some experts have pointed to the uncertainty around trade negotiations as a key reason for the Fed's reluctance to adjust its rates immediately. Currently, the Fed's main policy interest rate remains between 4.25% and 4.50%, with market expectations for rate cuts beginning in September, rather than earlier in the summer.

Consumer Inflation Expectations and Global Trade Outlook

Consumer inflation expectations are rising, with the financial markets increasingly anticipating that the Fed will ease its stance on interest rates later this year. While the market’s optimism about a trade truce between the US and China may provide some relief, the long-term impact of tariffs on US businesses and consumers remains uncertain.

The situation is further complicated by the ongoing global trade tension. While there is a temporary reduction in tariff rates, global businesses remain wary of the potential for renewed trade disputes. This caution is reflected in both the reduced expectations of economic growth and the adjusted market forecasts for inflation.

Outlook for the US Economy and the Fed’s Future Actions

With inflation still above the Fed’s 2% target, the central bank faces a delicate balancing act. The Fed’s recent decision to hold rates steady has been supported by the lack of significant signs of economic downturn. However, the uncertainty surrounding trade policies and inflation's trajectory means the Fed is unlikely to take immediate action.

Analysts expect the Fed to adjust its policies slowly, potentially introducing two rate cuts by the end of 2025, with the first anticipated in September. However, any premature actions to reduce rates in an environment of rising inflation could risk stoking further price pressures, potentially derailing the economy's recovery.

In conclusion, while April's CPI data suggests a cooling of inflation in the US, the long-term impacts of Trump's tariffs and the Fed's cautious approach to rate cuts continue to keep market participants on edge. The upcoming months are likely to see more volatility in inflation expectations and economic policy as the effects of trade policies play out.

Source: FT

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Stocks

US equity futures were cautiously higher pre-bell Wednesday as traders digested the impact of Tuesday's consumer inflation report.

Dow Jones Industrial Average futures gained 0.07%, S&P 500 futures increased 0.2%, and Nasdaq futures were up 0.3%.

Data released Tuesday by the Bureau of Labor Statistics showed the US seasonally adjusted consumer price index rebounded by 0.2% in April from March's 0.1% decline, below expectations for a 0.3% increase in a survey compiled by Bloomberg.

Oil prices were lower, with front-month global benchmark North Sea Brent crude down 1.2% at $65.88 per barrel and US West Texas Intermediate crude 1% lower at $62.90 per barrel.

Source: MT Newswires

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Gerik

Economic

Bond

A Changing Landscape: The Struggle of Industrial Real Estate Bonds

Vietnam's corporate bond market is experiencing significant upheaval, particularly in the industrial real estate sector, which has historically been a major draw for foreign direct investment (FDI). According to reports from VIS Rating, the volume of bonds issued by the industrial real estate sector dropped by 18% in 2024, and a further decline is expected in 2025. This decline is due to multiple factors, including a slowdown in FDI, a 24% drop in newly registered foreign investment in the first four months of 2025, and a broader global economic slowdown exacerbated by U.S. trade policies.

"Industrial real estate, once seen as a safe haven for foreign capital, is now facing significant challenges," said Đỗ Văn Hạnh, Chief Economist at Fulbright University. The sector is grappling with oversupply in land, complex legal frameworks, and the impacts of U.S. trade tariffs, which have made multinational companies pause or reconsider expansion plans in Vietnam.

Moreover, the increasing costs associated with compliance and sustainable investment requirements, as well as rising supply chain risks, have contributed to the stagnation in industrial real estate investments. This has resulted in a dramatic slowdown in bond issuance in this sector, which has traditionally attracted considerable foreign interest.

The Growing Appeal of Housing, Auto, and Renewable Energy Sectors

On the other hand, other sectors are seeing a surge in bond issuance. Housing, automobiles, and renewable energy are becoming the new stars in the corporate bond market for 2025. These sectors are attracting both local and foreign investors due to favorable policy changes and a growing demand for infrastructure development.

In the housing sector, legal reforms and looser banking credit policies are fueling an increase in bond issuance. VIS Rating predicts that 60% of the bonds maturing in 2025 will be in the housing sector, with most projects having a clear path for debt restructuring. The automobile sector is also poised for growth, with companies like VinFast benefitting from the removal of import taxes on components starting in February 2025. The automotive bond issuance is expected to grow by over 30% in 2025.

The renewable energy sector, despite facing some challenges in paying back the principal and interest of its bonds, is seeing new opportunities. The successful negotiation of electricity prices in recent months is expected to stabilize cash flow for renewable energy projects, making them more attractive to bond investors.

The Market’s New Risk Standards

The ongoing bond maturity wave of 151 trillion VND highlights a significant shift in how investors view safety in the Vietnamese market. It’s no longer just about the availability of land or factories; the focus has shifted towards cash flow strategies, risk management, and policy adaptability.

For many investors, the ability to manage liquidity and ensure consistent cash flow from projects has become paramount. "151 trillion VND in maturing bonds is not necessarily a risk if companies can adapt. However, it could be a ticking time bomb if firms continue to rely on the same easy bond issuance strategies from the past," warned Đỗ Văn Hạnh.

This shifting focus is redefining the market’s standards for safe investments, and sectors that can adapt to new financial realities and market expectations are more likely to succeed.

To stay updated on all economic events of today, please check out our Economic calendar

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Michelle

Economic

Forex

U.S. Federal Reserve Vice Chair, Philip Jefferson, addressed the inflation outlook in light of potential new import taxes during a New York Fed event on Wednesday. Recent data suggested progress toward the 2% inflation target set by the Federal Reserve, but the potential for new import taxes has introduced uncertainty.

Consumer prices in April did not rise as much as analysts had anticipated. However, Jefferson noted that the future path of inflation is surrounded by uncertainty. If the announced tariff increases are maintained, they could disrupt the progress on disinflation and might result in a temporary inflation spike.

Jefferson explained that the persistence of tariff-induced inflationary pressure would depend on various factors. These include the implementation of trade policy, the extent to which consumer prices are affected, the response of supply chains, and overall economic performance.

At the last Fed meeting, Jefferson supported maintaining the policy rate of interest at its current level, which he described as "moderately restrictive." He believes that the range of 4.25% to 4.5% is well positioned to react to any future developments.

Despite a slight contraction in U.S. economic output in the first quarter, Jefferson views the labor market as solid. He attributed the contraction to import data that exaggerated the slowdown in the economy. Nevertheless, he acknowledged a decline in sentiment among businesses and households and is closely monitoring for signs of weakening economic activity.

Source: Investing

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Adam

Stocks

And just like that

The S&P 500 is back in the green. After being at one point down more than 17% for the year, the index rose 0.72% Tuesday to erase its 2025 loss. Hopes for a trade war détente and a softer-than-expected inflation report helped push stocks higher during the trading session. The Nasdaq Composite closed up 1.61% for its fifth-straight day of gains, thanks in part to a 5.6% boost in shares of Nvidia. But a nearly 18% drop in shares of UnitedHealth Group weighed on the Dow Jones Industrial Average , which sank 269.67 points, or 0.64%. Follow live market updates.

$600 billion ‘bromance’

At the start of President Donald Trump’s trip to the Middle East, the White House on Tuesday announced that Saudi Arabia has committed to investing $600 billion in the U.S. Speaking at the U.S.-Saudi Investment Forum in Riyadh, Trump praised the Saudi kingdom and its leader, Crown Prince Mohammed bin Salman, with one summit attendee describing their relationship as a “bromance for the ages.” Trump also announced that the U.S. will remove all sanctions on Syria, and he met with Syrian leader Ahmed al-Sharaa in Saudi Arabia the next day. Other news that came out of the forum included Nvidia’s plans to sell more than 18,000 of its latest AI chips to Saudi company Humain, and Saudia Arabia’s approval of Elon Musk’s Starlink for aviation and maritime use in the kingdom.

More tech layoffs

Microsoft is laying off 3% of its total workforce — about 6,000 people — the company said Tuesday. The cuts across all levels, teams and geographies likely represent the tech giant’s largest round of layoffs since 2023, when it eliminated 10,000 roles, and follow a small round of performance-based cuts in January. “We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” a Microsoft spokesperson said in a statement to CNBC. One objective of the new round of cuts, which are not related to performance, is to reduce layers of management, the spokesperson said.

IPO plans

Fintech company Chime filed paperwork on Tuesday to go public on the Nasdaq, and it wants to make one thing clear: “Chime is a technology company, not a bank,” the digital banking firm said in its prospectus. The company brought in $518.7 million in revenue in the March quarter with 8.6 million active members, about 23% more users than the same time last year. Chime, which plans to file under the ticker symbol “CHYM,” is only the latest emerging tech company to test the market’s appetite for new offerings. Digital physical therapy startup Hinge Health said Tuesday it plans to raise up to $437 million in its upcoming IPO, while stock brokerage platform eToro priced its IPO above its expected range at $52 a share. CoreWeave , which reports its first-quarter earnings results after the bell Wednesday, debuted on the Nasdaq at the end of March.

‘Good at bad stuff’

Experts are sounding the alarm about the safety of artificial intelligence — or the lack thereof. As companies like Meta, Google and OpenAI race to stay competitive, AI players have shifted from focusing on cutting-edge research to prioritizing the development of revenue generating, consumer-ready AI services. In the process, they’re increasingly taking shortcuts when it comes to the safety testing of their models, experts say. “The models are getting better, but they’re also more likely to be good at bad stuff,” said James White, CTO at cybersecurity startup Calypso.

Source: cnbc

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Warren Takunda

Economic

A soft domestic outlook and a sense that we're running out of good news on the trade war front are forcing a consolidation in the NZ Dollar, which could indicate a recent rebound is over.

Stocks and commodities are softer in midweek trade, as is the U.S. Dollar. The New Zealand Dollar is softer against European currencies but holds a gain on the U.S. Dollar, suggesting some element of the 'sell America' trade is at play.

(When stocks and USD fall in tandem, it indicates the USD is not benefiting from its safe haven characteristics and points to an idiosyncratic concern, such as a loss of confidence).

This trade sees the USD fall and European currencies benefit. However, it also sees currencies that have a strong link to commodity price performance struggle.

The NZD is one such commodity currency, and it is softer on the day alongside its peers in this basket.

"The highly uncertain nature of the outlook in itself creates uncertainty, which fuels a level of risk-aversion particularly evident in commodities markets and commodities currencies, still limiting their gain when positive developments do occur," says Annabel Bishop, an economist at Investec.

The Kiwi and commodity currency basket benefited through late April and early May as the U.S. indicated the April 02 'Liberation Day' tariffs were a starting point for negotiations, and that the ultimate levels would be far lower. New Zealand Dollar Fades_1

Above: GBP/NZD at daily intervals.

Gains culminated in this week's Sino-U.S. announcement that a trade accord had been reached.

"Rowing back from the high water mark on tariff rates helps but we’re not going all the way back to pre-Liberation Day levels, even if other deals are done in this 90-day pause window on reciprocal tariffs," says Sam Hill, Head of Market Insights at Lloyds Bank.

A sense that the good news 'is in' could scupper further NZD gains. "We would look to take profit as trade/economic optimism looks well priced," says Noah Buffam, a strategist at CIBC Capital Markets.

She explains that trade agreements have not been nailed down in all cases to reduce or largely eliminate ‘Liberation Day tariffs’, and so a high degree of uncertainty prevails, limiting the recovery in commodities prices, and so in commodities currencies.

Even if global concerns about trade fade further, the New Zealand economic outlook is a potential headwind for the Kiwi.

New research from Barclays says:

"New Zealand is still feeling the negative effects on demand from a more restrictive monetary policy. The RBNZ policy rate is now at the top of its neutral range of 2.5-3.5%, with a bias towards more easing.

"We think the economic backdrop means risks are tilted toward the RBNZ's cutting below the midpoint of this range and possibly into accommodative territory, which would be a drag on the NZD."

The next Reserve Bank of New Zealand interest rate decision falls on May 28. Further rate cuts, or guidance that rates will fall further, tend to weigh on a currency.

Should economic data deteriorate on the back of recent trade war-induced uncertainty, the RBNZ could signal a willingness to cut deeper, prompting renewed NZD weakness.