Oil retreats from 4-month highs ahead of key inflation data
Investing.com — Crude oil prices retreated Monday, handing back some of the recent strong gains in the wake of the decision of top producers Saudi Arabia and Russia to extend their output cuts.
By 08:50 ET (12.50 GMT), the U.S. crude futures traded 0.8% lower at $82.17 a barrel, while the Brent contract dropped 0.8% to $85.59.
Both benchmarks recorded their sixth consecutive weekly gains last week to four-month highs, having posted double-digit gains over the last month.
However, traders have decided to take some of these recent gains off the table at the start of the new week, amid caution ahead of some key inflation data in the U.S. and China.
U.S. consumer price index inflation is expected to have increased slightly in July, remaining above the Federal Reserve’s target range and potentially attracting more hawkish measures from the central bank.
On the other hand, Chinese inflation is expected to have declined further in July, heralding more near-term weakness in the world’s largest oil importer, as a post-COVID economic recovery runs dry.
Chinese trade data, due on Tuesday, is also expected to provide more insight into crude demand in the country. China’s oil imports have remained close to record highs this year.
That said, the underlying tone has been boosted by last week’s decisions by Saudi Arabia and Russia to extend their production cuts into September, raising hopes that tightening supplies will offset a potential slowdown in demand this year.
Saudi Arabia will keep trimming production by 1 million barrels per day and Russia will cut oil exports by 300,000 barrels a day, the countries confirmed on Thursday ahead of a meeting of the Organization of Petroleum Exporting Countries and allies the following day.
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