Oil prices moved little in Asian trade on Monday after a strong run-up over the past week, with traders now hunkering down before a string of key central bank meetings this week helmed by the Federal Reserve.
The prospect of tighter global supplies pushed oil prices to four-month highs last week, following signs of strong U.S. refinery demand and positive forecasts from the Organization of Petroleum Exporting Countries and the International Energy Administration.
Crude prices hovered around these highs on Monday.
Brent oil futures expiring in May rose 0.1% to $85.41 a barrel, while West Texas Intermediate crude futures rose 0.2% to $80.72 a barrel by 20:39 ET (00:39 GMT). Both contracts rose about 4% in the prior week.
Fed, c.bank meetings sought for more economic cues
But momentum in oil markets was marred by anticipation of a string of key central bank meetings, most notably the Fed.
The Fed is set to conclude a two-day meeting on Wednesday and is widely expected to keep rates steady. But markets were wary of any potentially hawkish signals from the central bank, especially following hotter-than-expected inflation data in recent months.
Before the Fed, the Bank of Japan is set to decide on interest rates on Tuesday, and could potentially mark an end to nearly a decade of ultra-loose policy.
Tighter global monetary conditions point to more pressure on the economy and could potentially stymie oil demand- which has been a key point of concern for oil markets over the past two years.
Beyond the Fed and the BOJ, the Reserve Bank of Australia and the Bank of England are also due to meet this week, and are expected to signal few changes in interest rates.
Oil markets await more China data
A string of key economic indicators, as well as an interest rate decision in top oil importer China are also on tap this week.
China is set to release industrial production and retail sales figures for the first two months of 2024 later on Monday, while the People’s Bank of China will decide on its key loan prime rate on Wednesday.
Any signs of improving economic conditions in the country are likely to provide positive cues to oil markets. Retail spending in particular is expected to have been buoyed by the Lunar New Year holiday.
But the world’s largest oil importer is still struggling with a broader slowdown in economic growth- a trend that could potentially hurt its appetite for crude.
