US markets will be closed on Tuesday due to the Independence Day holiday. In the previous session, oil benchmarks had settled down approximately 1%.
Analysts have mixed expectations regarding macroeconomic indicators. Global factory activity has declined due to sluggish demand in China and Europe, and US manufacturing has also fallen. They are currently nearing levels last seen during the initial wave of the COVID-19 pandemic. However, JP Morgan analysts believe that the US and global economies are not at immediate risk of entering a recession. This is due to a strong services sector, easing financial conditions, and improvements in the US goods sector. Nevertheless, ANZ analysts suggest that weaker economic growth implies weak merchandise demand, which could weigh on distillates consumption.
Short-term Forecast: Mixed Dynamics
Given the supply cuts from Saudi Arabia and Russia, there is a bullish sentiment in the market, providing a stronger floor for Brent crude around $70 per barrel. However, the uncertain macroeconomic outlook and weak crude demand could dampen prices, leading to a bearish sentiment. It is important to monitor further developments in supply dynamics and economic indicators to gauge the direction of crude oil prices in the near term.
