Oil prices steady after rebounding from 3-mth lows, inflation data awaited

Investing.com-- Oil prices steadied in Asian trade on Tuesday after rebounding from more than three-month lows over the past two days, with focus remaining chiefly on upcoming inflation readings this week.

Crude benefited from thinner volumes on Monday, owing to public holidays in the UK and the U.S.. Oil also benefited from some bargain buying after sinking to its lowest level since early-February last week. 

Brent oil futures expiring in July fell 0.1% to $83.04 a barrel, while West Texas Intermediate crude futures steadied at $78.64 a barrel by 20:49 ET (00:49 GMT). 

Inflation data awaited for more rate cues 

Focus this week remained on key inflation readings from the U.S. and other major economies.

In the U.S., PCE price index data, which is the Federal Reserve’s preferred inflation gauge, is due this Friday, and is expected to show some mild cooling in inflation. But the reading is still expected to remain well above the Fed’s 2% annual target, giving the bank more impetus to keep rates higher for longer.

Fears of the Fed were a key point of pressure on oil prices last week, after several Fed officials warned that sticky inflation will keep the bank from loosening monetary policy early. They also boosted the dollar, which further weighed on prices.

High rates are expected to stymie economic activity, in turn weighing on oil demand. 

Inflation data from the eurozone, Australia and Japan is also due through the week, and is likely to factor into monetary policy expectations for their respective central banks.

Markets were also seen pricing in a potential interest rate cut by the European Central Bank next week.

Beyond the inflation data, purchasing managers index readings from top oil importer China are also due this week. 

OPEC+ meeting awaited for supply cues 

Focus was also on an upcoming meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+), which is set to take place online on June 2.

Focus will be squarely on whether the cartel will extend its current run of production cuts- at 2.2 million barrels per day- past a June 30 deadline.

The OPEC+ had slashed production over the past year to support oil prices. But the move had provided only fleeting support to prices, as markets fretted over sluggish demand.