Kaohoon Morning Brief – 6 June 2022

1) Saudi Arabia raises oil prices for Asian customers above market expectations

Saudi Arabia raised oil prices for its biggest market of Asia for July shipments amid rising demand as the region’s main economies ease coronavirus restrictions.

Saudi Aramco raised its key Arab Light crude grade for Asian customers by $2.10 a barrel from June to $6.50 above the benchmark it uses, which is higher than the $1.50 raise expected by the market.

The increase for July shipments resumes a series of increases that began in February and were only broken when state producer Saudi Aramco cut prices for its June shipments to $4.40 a barrel. The cut came after strict lockdown in China amid surging Covid-19 cases in major cities such as Shanghai and Beijing. 


2) US adds 390,000 jobs in May, unemployment rate maintains at 3.6%

The U.S. economy in May added 390,000 jobs while the unemployment rate remained unchanged from April at 3.6%, the lowest level since the start of the pandemic and only 0.1% above the 50-year low we saw in February 2020 (3.5%), according to data released by the Bureau of Labor Statistics.

The figure shows little change from April, which saw an increase of a newly revised figure of 398,000 jobs, which was recently adjusted by 30,000 from the originally reported 428,000.


3) China’s services activity rises in May, but still contract

China’s services activity contracted for a third straight month in May, according to a private business survey showed on Monday. 

The Caixin services purchasing managers’ index (PMI) rose to 41.4 in May from 36.2 in April, though still contracting, the reading edged higher as Chinese authorities eased some Covid-19 restrictions in May. However, the rise to 41.4 was still below market expectations of 47.3.


4) Oil prices bounce back above $120 level

Oil prices bounced back above $120 level despite the report of OPEC+ output hike that crashed the oil market on Thursday last week. 

The international benchmark Brent crude rose 0.68% to $120.53 per barrel. Meanwhile, the West Texas Intermediate gained 0.69% to $119.70 per barrel.