Investing.com– Oil prices rose in Asian trade Monday, benefiting from a weaker dollar, as recent inflation data prompted traders to increase bets that the Federal Reserve will cut interest rates by September.
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However, larger gains were dampened by concerns over top importer China after data released over the weekend showed trade 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 ruins in the Middle East and Russia increased concerns over potential supply disruptions, leading traders to attach a greater risk premium to the crude oil.
Oil benefits from the drop in the dollar, other rate indices are 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 slowing slightly in May.
The figure sparked some optimism that U.S. inflation was slowing and prompted traders to bet more on a 25-basis-point rate cut in September, weighing 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 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.
The 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.
