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Morgan Stanley Sees Chinese Auto Market Recovery Gaining Momentum in Late Summer 
US Dollar Slips After PCE Inflation Data Eases Fed Rate Hike Expectations 
Bank Regulation Rollbacks in the U.S. and UK Could Increase Financial Risks, Study Warns 
Asian Currencies Stay Range-Bound as Investors Eye China Data, RBNZ Outlook and U.S.-Iran Ceasefire 
Oil Prices Rise as US-Iran Tensions Threaten Strait of Hormuz Oil Shipments 
Oil Prices Dip on Rising U.S. Inventories and Middle East Tensions
Oil prices declined during Asian trading on Wednesday following an unexpected increase in U.S. oil inventories. Meanwhile, global attention remained on U.S. diplomatic efforts to ease rising tensions in the Middle East.
U.S. Inventory Build Exceeds Expectations
According to data from the American Petroleum Institute (API), U.S. oil inventories increased by 1.643 million barrels last week, surpassing the forecasted 0.7 million barrel build. This sparked concerns that U.S. fuel demand may be softening, potentially signaling a similar outcome in official data set to be released later on Wednesday.
Diplomatic Efforts in the Middle East
Despite a brief rise in crude prices after Israel claimed responsibility for the death of Hezbollah's Hashem Safieddine, prices soon fell as U.S. Secretary of State Antony Blinken continued diplomatic talks in Israel. These discussions aim to de-escalate conflict in the region, while also pushing for increased humanitarian aid to Gaza.
China’s Economic Signals and Dollar Strength
Market participants are also closely monitoring China, the world’s largest oil importer, amid ongoing concerns about reduced demand. Further pressure on oil prices came from a strong U.S. dollar, driven by expectations of smaller interest rate cuts by the Federal Reserve, pushing the currency to its highest level since August.
Goldman Sachs Oil Price Forecast
Goldman Sachs expects oil prices to average $76 per barrel by 2025, citing moderate surpluses and spare production capacity among major oil producers. The bank noted that Middle East tensions have not significantly affected oil supplies and that OPEC+ plans to increase output later this year.
