Market Comments: Petroleum futures markets are trading mixed his morning.
Crude is higher this morning but had a weaker tone overnight, due to Chinese industrial output data disappointed, although April's refining numbers pointed to more positive signs of demand.
China has dramatically increased its use of the yuan to buy Russian commodities over the past year, with nearly all of its purchases of oil, coal, and some metals are now settled in the Chinese currency instead of dollars. Chinese imports of major commodities from its northern neighbor totaled $88.3 billion in 2022, up 52 percent from 2021 as reformers utilities and smelters snapped up discounted Russian resources after Western buyers shunned the trade shortly after Moscow's invasion of Ukraine.
Leaders of the Group of Seven (G7) nations plan to tighten sanctions on Russia at their summit in Japan this week, with stops aimed at energy and exports aiding Moscow's war efforts. New measures announced by the leaders during the May 19-21 meetings will target sanctions evasion involving third countries, and seek to undermine Russia's future energy production and curb trade that supports Russia's military. Separately, U.S. officials also expect G7 members will be free to adjust their approach to sanctions so that, at least for certain categories of goods, all exports are automatically banned unless they are on a list of approved items.
In his first interview since taking office, Iraqi Oil Minister Hayan Abdel-Ghani said that "there will be no additional reduction, as for Iraq, we cannot reduce further." OPEC+ cut production in late 2022 as the demand outlook weakened, then surprised markets with another cut of 1.2 million bpd in early April. The next meeting is scheduled for June 4.
According to the USDA, U.S. corn planting stands at 65 percent completed vs. 40 percent last week and the five-year average of 5 percent. As for soybeans, 49 percent of the crop is planted, vs 35 percent last week and the five-year average of 36 percent.
