The energy sector is poised for a lower start, pressured by weakness in the underlying commodities while major equity futures were flat following yesterday’s steep drop.
WTI and Brent crude oil futures extended their slide lower, falling on a rise in economic uncertainty and continued strength in the greenback which offset the bullish impact of a price cap placed on Russian oil and the prospects of a demand boost in China.
Futures yesterday recorded their biggest daily drop in two weeks after U.S. services industry data indicated a strong U.S. economy and drove expectations of higher interest rates than recently forecast.
The U.S. dollar index edged lower this morning but was still buoyed by bets of higher interest rates, following the biggest rally in two weeks yesterday.
In China, more cities are easing COVID-19-related curbs today and the country is set to announce even more relaxation tomorrow, prompting expectations of increased demand.
Natural gas futures continued to build on yesterday’s 11% decline, pressured warmer weather forecasts in key consuming regions and another delay in the Freeport LNG export facility.
