Oil prices rose slightly on Monday, recovering modestly from steep losses last week. Traders are awaiting further cues on U.S. inflation and an upcoming meeting of the Organization of Petroleum Exporting Countries (OPEC).
However, trading volumes are expected to be limited due to market holidays in the U.S. and the U.K. Brent oil futures for July delivery gained 0.1 percent to $82.22 per barrel, while West Texas Intermediate crude futures rose 0.2 percent to $77.85 per barrel as of 20:41 ET (00:41 GMT).
Read more: Oil prices hover near multi-month lows, poised for weekly decline on rate hike concerns
Both oil contracts were down over 2 percent last week after falling to February lows. This was driven by fears of persistently high interest rates, which raised concerns about future demand. The focus this week will be on U.S. personal consumption expenditures (PCE) price index data, the Federal Reserve’s preferred inflation gauge.
Fed warnings weigh on prices
Multiple warnings from Fed officials about sticky inflation had weighed on oil prices last week, as traders priced out expectations of interest rate cuts this year. Markets worry that high rates will stifle economic activity and dampen crude demand in the coming months. Unexpected growth in U.S. inventories also put downward pressure on prices, even as demand is set to rise with the summer travel season.
Upcoming OPEC+ meeting in focus
Oil markets are also anticipating the OPEC+ meeting on June 2, where the producer group is expected to decide whether to extend its ongoing production cuts beyond the end of June. Extended cuts and potential demand improvement could tighten oil markets in the near-term, which would support prices. OPEC expects demand to grow by 2.25 million barrels per day this year, while the IEA forecasts weaker demand growth of 1.2 million barrels per day.
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