Oil Prices Rise on Mixed Chinese Inflation Data Ahead of U.S. Reports
Investing.com–
On Monday, oil prices climbed, rebounding from slight losses the previous week as traders analyzed mixed Chinese inflation data in anticipation of crucial U.S. inflation readings. At 08:15 ET (12:15 GMT), crude oil went up by 0.7% to $83.33 per barrel, while Brent rose by 0.8% to $78.85 a barrel.
Chinese Inflation Data
Chinese inflation data for April, which came out over the weekend, displayed a continued recovery in inflation, suggesting that significant monetary support from Beijing was boosting spending. However, Chinese factory and business activity remained weak as inflation shrank for the 19th consecutive month. This signified that the world’s largest crude importer faced challenges despite some recovery.
Alberta Wildfire Impact
Adding to the market’s tone was news of an evacuation alert for Fort McMurray, Alberta, due to an out-of-control wildfire southwest of the major Canadian oil town. This event raised concerns about potential output cuts, reminiscent of the 2016 wildfire that forced the evacuation of 90,000 residents and shut down over a million barrels per day of oil production.
Market Speculation
Furthermore, market analysts speculated about the potential outcomes of the upcoming OPEC+ meeting in June, with Goldman Sachs anticipating stable oil supply from Saudi Arabia. On the other hand, Iraq’s reluctance to agree to further supply cuts added uncertainty to production levels.
U.S. Inflation Data
Crude prices had been on a mild downtrend following weak U.S. consumer confidence data and high inflation projections. Ahead of key U.S. inflation reports this week, concerns were raised about potential economic slowdowns in the world’s largest fuel consumer.
As the focus shifts to U.S. inflation data, with figures for April due on Tuesday and the core reading following on Wednesday, market sentiments remain cautious. Any signs of cooling U.S. inflation might prompt the Federal Reserve to consider interest rate adjustments, influencing oil prices and market dynamics.
(Ambar Warrick contributed to this article.)
