Watch: Oil markets jittery amid Middle East tensions; August PVC talks, coal demand in focus

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This week, oil markets are closely watching the escalating geopolitical tensions in the Middle East, although no physical impact on supply has been seen yet. A fifth consecutive week of declines in US commercial crude stocks has also added to the overall bullish sentiment. However, a meeting of top OPEC-plus officials on August 1 set a slightly bearish tone as the group reiterated plans to start unwinding voluntary output cuts from October. A wider pull-back in financial markets is also pressuring oil, with Brent futures around the $80 per barrel mark.

In the chemicals sector, August polyvinyl chloride negotiations will continue amid complex global market conditions. Factors influencing the negotiations include decreased global demand from the monsoon season in Asia, new European antidumping duties on US products, corrections in Asian freight rates, and robust US PVC supply. August offers have been heard approximately $50 per metric ton lower on the month.

The Asian thermal coal market is expected to remain under pressure this week due to low demand from top importers China and India. Higher hydropower generation in China, the ongoing monsoon season in India, and sluggish industrial demand are contributing to this trend. However, pockets of demand for Indonesian mid-CV coal are expected as India kickstarts pre-festive buying.

Provisional data on India’s steel industry performance in July is due for release, with expectations of record-setting steel imports, mainly from China. Exports are expected to have declined year over year.

China’s lithium salts market remains on a downward trajectory despite new measures to boost its trade-in program. These measures will drive up electric vehicle sales and could ultimately increase total domestic vehicle sales.

I’m Daniel Weeks. Thank you for kicking off your Monday with S&P Global Commodity Insights.