Brent Crude Gives Up Gains

US crude oil production has rallied by more than 10.00% since the middle of last year to 9.293 million barrels per day. That’s just 500,000-600,000 below the current output of top producers Saudi Arabia and Russia. However, the big story weighing on energy prices is recent demand growth statistics from key consumer China, with both imports and exports from the country slowing in recent months. Investor focus will be on American Petroleum Institute’s weekly report on US crude stockpile estimates for last week. The market is forecasting crude supplies to have fallen by 1.800 million barrels, while gasoline stocks are projected to drop by 875,000 barrels. While the short-term trend remains bearish, a drop below $48.50 a barrel will likely accentuate the selling pressure especially if OPEC and non-OPEC producers fail to arrive a production cut extension deal.

After a surprise jump in March, Canadian housing starts dropped in April as groundbreaking for single and multiple units declined according to data released by the Canada Mortgage and Housing Corporation. The seasonally adjusted annual pace of housing starts fell -15.10% to 214,098 units last month, printing well below analyst forecasts anticipating a climb to 220,000. In addition, the March figure was revised lower to 252,305 units, highlighting the slowing momentum in the sector. Canada's housing boom has been showing recent signs of slowing after a series of government actions intended to discourage lending and imposition of taxes on foreign buyers in Toronto and Vancouver. Prices in both cities have soared at double-digit percentage rates, fuelling fears of a bubble in the housing sector. Despite the growing housing concerns, USDCAD is largely unchanged Tuesday, trending just above 1.3700.