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, 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 turmoil in the Middle East and Russia increased concerns about potential supply disruptions, leading traders to attach a larger 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 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 speak 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
Weak purchasing managers’ indices in China, released over the weekend, raised concerns in the world’s top oil importer.
The contracted for the second consecutive month, while the also weakened.
The purchasing managers’ index data reinforced concerns that the country’s economic growth is slowing despite recent stimulus measures, which could bode ill for crude oil demand.
