Oil prices rise as rate hike fears ease; China data deluge in focus
Investing.com-- Oil prices rose in Asian trade on Monday amid easing fears of more Federal Reserve rate hikes, although anticipation of several economic readings this week, particularly from China, kept traders on edge.
Markets were also encouraged by the prospect of tighter supplies, after major suppliers Saudi Arabia and Russia said they will maintain their ongoing supply reductions until the end of the year, heralding tighter oil markets.
Crude markets were still nursing steep losses over the past two weeks, as traders priced in a much lower risk premium from the Israel-Hamas war, given that fears of supply disruptions in the Middle East had not materialized.
But these losses were somewhat tempered by a drop in the dollar, as less hawkish signals from the Fed and weaker-than-expected payrolls data spurred increased bets that the central bank will not hike rates any further.
The Israel-Hamas conflict also showed no signs of de escalation, as Israel rejected calls for a ceasefire, and as reports suggested that Russia’s Wagner mercenary group planned to provide Hezbollah with air defense systems.
Brent oil futures rose 0.5% to $85.16 a barrel, while West Texas Intermediate crude futures rose 0.7% to $81.09 a barrel by 19:13 ET (00:13 GMT). Both contracts plummeted some 6% in the prior week.
Crude markets were now focused squarely on key economic readings from China, due later in the week. Chinese trade data is due on Tuesday and is expected to provide more cues on commodity demand in the country.
While China’s oil imports and fuel demand have remained robust this year, the country has been steadily increasing its stockpiles, which could spur a drop in imports over the coming months. Traders also fear a drop in fuel
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