Oil prices remained range-bound on Monday after experiencing three straight weeks of losses due to concerns over worsening demand and economic growth. Focus is now shifting to key economic readings from the United States and China, which could impact oil prices.
The recent slump in crude prices can be attributed to various factors such as concerns over a U.S. recession and banking crisis, rising interest rates, and soft Chinese demand. However, markets found some support on Friday due to stronger-than-expected nonfarm payrolls data that indicated some resilience in the U.S. economy.
Crude prices have rebounded slightly, with Brent oil futures remaining flat at $75.36 a barrel, while West Texas Intermediate crude futures rose 0.1% to $71.44 a barrel. This recovery may not be sustained, given the uncertainty over how the Federal Reserve will react to Friday’s strong labor data.
This week, the focus will be on U.S. consumer price index inflation data, due on Wednesday, which will provide insights into whether inflation has eased further after a sharp increase in interest rates.
Meanwhile, trade data from China, due on Tuesday, is expected to provide cues on commodity imports by the world’s largest oil importer, although overall Chinese imports are anticipated to weaken further in April.
Chinese inflation data is also due on Wednesday, which is expected to show continued weakness in price pressures as the country struggles to shore up spending and investment.
Softer-than-expected economic readings from China, particularly on the manufacturing sector, have raised concerns about whether a recovery in the country will be sufficient to push oil demand to record highs this year.
Despite an initial boost from an unexpected production cut by the Organization of Petroleum Exporting Countries (OPEC), the recent losses in crude prices have largely negated the impact. However, with an OPEC cut set to take effect from May, oil supplies are set to tighten, which could support prices in the near-term.
Please continue to read new articles here about merchandise assessed by Waytrade.