Brent hovers around $83 as inflation data takes center stage

Brent hovers around $83 as inflation data takes center stage
Brent hovers around $83 as inflation data takes center stage

By Natalie Grover

LONDON (Reuters) -Oil prices were little changed on Monday after losing about $1 a barrel in the previous session on signs that US policymakers are likely to keep interest rates higher for longer.

Brent crude futures were up 21 cents at $83 a barrel by 1036 GMT. US West Texas Intermediate crude futures were up 27 cents at $78.53.

Although prices were supported by a few factors last week, including a lack of progress in the latest round of negotiations to halt hostilities in Gaza, economic factors are back in the spotlight.

Commentary from policymakers suggests that a lowering of borrowing costs is expected sooner in the UK and Europe than in the United States.

US inflation data this week will further inform the Federal Reserve on interest rate policy.

Analysts expect the US central bank to keep its policy rate on hold for longer, supporting the dollar and making dollar-denominated oil more expensive for investors holding other currencies.

Meanwhile, Chinese data at the weekend showed consumer prices rising for a third straight month in April while producer prices extended declines, signaling improved domestic demand.

Further price support comes from expectations that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, will extend supply cuts into the second half of the year.

Iraq, the second-largest OPEC producer, is committed to voluntary oil production cuts agreed by the producer group, its oil minister told the state news agency on Sunday.

The comments followed the minister’s suggestion on Saturday that Iraq had made enough voluntary reductions and would not agree to any additional cuts proposed by the wider OPEC+ group at its June meeting.

OPEC+ has previously called out Iraq for pumping more than its output quota in the first three months of 2024. Baghdad agreed to compensate with additional production cuts over the rest of the year, the group said.

(Reporting by Natalie Grover in London and Florence Tan in SingaporeEditing by David Goodman)

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