Oil prices steady ahead of OPEC report, more rate cues

Investing.com-- Oil prices rose slightly in Asian trade on Monday, steadying after three straight weeks of losses as traders awaited more cues on U.S. interest rates and the OPEC due later this week. 

Crude had fallen last week as a rebound from four month lows was stalled by a stronger dollar. The greenback surged on stronger-than-expected nonfarm payrolls data.

Brent oil futures expiring in August rose 0.2% to $79.77 a barrel, while West Texas Intermediate crude futures rose 0.2% to $75.38 a barrel by 21:40 ET (01:40 GMT). 

Market holidays in China, Australia and Hong Kong kept trading volumes dull. 

OPEC report awaited for more cues on demand

The Organization of Petroleum Exporting Countries (OPEC) is set to release its monthly report on Tuesday, where the cartel’s outlook on annual oil demand will be closely watched. 

Bearish signals from the OPEC had battered oil prices last week, after the cartel and its allies, OPEC+, said it will begin scaling back some production cuts later this year. 

The forecast for high production, which came amid persistent concerns over worsening demand, saw oil prices plummet to four-month lows.

But crude reversed some losses after OPEC ministers clarified that they would not increase supply if prices remained weak. 

After the OPEC report, a monthly report from the International Energy Agency is also due later this week.

Fed meeting, inflation data on tap as dollar rebound weighs 

Oil prices were also pressured by a stronger dollar, after signs of persistent strength in the labor market saw traders swiftly price out bets on a September interest rate cut by the Fed.

The dollar rebounded after Friday’s nonfarm payrolls reading, which showed the labor market remained strong. A strong labor market and sticky inflation give the Fed more impetus to keep rates high for longer, which bode poorly for oil demand. 

The Fed is set to meet later this week and is widely expected to keep rates steady. But any signals on rate cuts will be closely watched.

Before the Fed, consumer price index inflation data is also due on Wednesday, and is likely to factor into the central bank’s outlook on inflation. 

The dollar also benefited from a drop in the euro, which hit a one-month low after the results of the European Union election showed a clear swing towards right-wing parties. 

A stronger dollar pressures oil demand by making the commodity more expensive for international buyers.