Chinese Manufacturing Underperformance Puts Pressure on Crude Prices
May 2, 2023
The markets will be focused on the Fed meeting which starts today, and this will keep the markets in a tight range until tomorrow when we get the Fed’s announcement on rates and the commentary afterward which traders will be wanting to hear if there are any clues about this expected rate hike to be the last for a while. The market fully expects a 25-point rise to internet rates so if that is what happens that news will likely do little to change the markets. The comments are where traders may hear something that causes them to take some action.
The crude market is under some selling pressure as Chinese manufacturing data was not strong. The official China National Bureau of Statistics manufacturing PMI index fell unexpectedly to a reading of 49.2 in April from 51.9 in March. A reading below 50 indicates contraction. China demand is a big factor in in where energy prices are headed.
US crude exports for the month of April have surpassed forecast, hitting a record 4.5 million bpd in March. US exports grew 22% last year from 2021.