Investing.com -- Oil prices moved little in Asian trade on Monday, retaining a bulk of their recent gains as markets awaited fresh cues from an OPEC meeting and U.S. economic data this week.
Crude markets pared some early losses after a private survey showed that China’s manufacturing sector grew slightly more than expected in June. But the reading was still weaker than May’s data, indicating continued weakness in the world’s largest oil importer.
Brent oil futures steadied at $75.43 a barrel, while West Texas Intermediate crude futures were flat at $70.61 a barrel by 22:17 ET (02:17 GMT).
Both contracts were sitting on strong gains from Friday, after data showed a bigger-than-expected drop in the Federal Reserve’s preferred inflation gauge. The reading triggered a rally across most markets, on bets that inflation will drop within the central bank’s target range, necessitating fewer interest rate hikes.
OPEC forum, U.S. data barrage due this week
Oil markets are squarely focused on a meeting of oil industry executives with energy ministers from the Organization of Petroleum Exporting Countries and allies later this week.
While the forum is not a policy meeting, meaning that any changes to OPEC production are unlikely, it is still expected to offer cues to the oil market, amid growing fears of worsening demand this year.
The OPEC had unexpectedly cut production twice so far in 2023 to tighten oil supplies and push up prices. But the measures provided a fleeting boost to prices, with crude still trading negative for the year.
A slew of economic readings from the U.S. - including nonfarm payrolls data - is also expected to provide more cues on the world’s largest oil consumer this week.
Data released last week indicated some resilience in the U.S. economy, which saw traders dial back expectations of a recession this year. The notion helped support oil prices.
Rate hikes, economic slowdown fears still in play
But despite recent strength in oil prices, they were still trading down between 8% and 10% for the year, amid persistent fears of rising U.S. interest rates and worsening demand.
Hawkish signals from the Federal Reserve have served as a key source of downward pressure on crude markets, as the central bank flagged at least two more rate hikes this year.
Markets fear that rising rates will further stymie economic activity, in turn weighing on crude demand this year.
Focus this week is also on the minutes of the Fed’s June meeting, for more insight into the central bank’s plans to hike rates.