Investing.com– Oil prices rose in Asian trading on Monday, benefiting from a weaker dollar, as recent inflation data prompted traders to increase bets on interest rate cuts by the Federal Reserve by September.
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However, broader gains were dampened by concerns over top importer China after data released over the weekend showed business activity in the country remained fragile.
The rose 0.3% to $85.29 per barrel, while the rose 0.4% to $81.84 per barrel as of 9:10 p.m. ET (01:10 GMT).
Both contracts were sitting on bumper gains in June as geopolitical turmoil in the Middle East and Russia increased concerns about potential supply disruptions, leading traders to attach a bigger risk premium to crude.
Oil benefits from dollar decline, more rate indices expected
The site fell about 0.2% in Asian trading, extending Friday’s declines after the – which is the Fed’s preferred inflation gauge – showed inflation eased slightly in May.
The figure sparked some optimism about slowing U.S. inflation and prompted traders to bet more on a 25 basis point rate cut in September, which weighed on the greenback.
A weaker dollar helps demand for oil by making the commodity cheaper for international buyers. It also increases operators’ appetite for risk.
This week, the focus is on signals from the Fed, with the expected to be released on Tuesday, while the is expected on Wednesday.
Key data from the is also expected on Friday, with the job market being a key element for the Fed in the movement of interest rates.
But even with positive signals on interest rates, inventory data released last week showed that U.S. fuel demand remained weak despite increased travel during the summer season.
China’s purchasing managers’ indices weak, demand concerns growing
The weakness of China’s purchasing managers’ indices, published over the weekend, raised concerns in the world’s largest oil importer.
The contracted for the second consecutive month, while the also weakened.
Purchasing Managers’ Index data reinforced fears that the country’s economic growth is losing steam despite recent stimulus measures, which could bode poorly for crude oil demand.
