OIL MKT DRIVERS: China Acts to Underpin Yuan, Easing Trade Angst

By Alex Longley

(Bloomberg) —

Summary of what’s shaping the oil market on Tuesday: China moved to limit the weakness in the yuan, helping ease some of the market turmoil that kicked off the week. The EIA’s monthly report was due, along with API inventories data.

China set the daily currency fixing stronger than analysts expected and announced the planned sale of yuan-denominated bonds in Hong Kong. The moves, which came after the U.S. labeled the country a currency manipulator, helped send the yuan higher

China also said it won’t depreciate the currency to be competitive; U.S. equity futures rose alongside European stocks
China likely will include oil in any retaliatory duties if the U.S. goes ahead with putting tariffs on all Chinese imports, according to Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies

* The EIA will publish its Short-Term Energy Outlook at ~12pm ET, while API inventory figures are due to be released at 4:30pm ET

** U.S. crude stockpiles are forecast to slip 3m bbl, in EIA data due on Wednesday
** Goldman trimmed its 2020 U.S. oil output growth figure to 1.1m b/d from 1.2m b/d with activity among private companies expected to slow

* President Trump imposed further sanctions on Venezuela, freezing the government’s assets in the U.S. and adding immigration restrictions
Japan’s Prime Minister Shinzo Abe doesn’t rule out his country joining a U.S.-led coalition to maintain security in the Strait of Hormuz

To contact the reporter on this story:
Alex Longley in London at alongley@bloomberg.net

To contact the editors responsible for this story:
Alaric Nightingale at anightingal1@bloomberg.net
John Deane, Brian Wingfield