By Ambar Warrick
Investing.com – Oil prices eased on Monday after last week’s sharp gains, as traders were cautious and took some profits ahead of OPEC and IEA demand forecasts and a flurry of economic data expected this week.
Crude prices rose more than 8% last week on the prospect of a recovery in Chinese demand after the country reopened its borders and essentially reaffirmed its move away from its strict zero-covid policy. Weakness in the country also supported oil prices amid signs of slowing inflation in the country.
Now the focus is on OPEC’s monthly report, which will be published on Tuesday. Markets are waiting to see if the cartel will change its forecasts for global demand in the face of China’s economic recovery.
It was down 0.5% at $85.09 a barrel in early Asian trade, while it was down 0.6% at $79.67 a barrel. Market volumes are expected to be limited due to the US holiday on Monday.
Traders also await the report on crude oil markets (IEA), due on Wednesday, for the body’s outlook on oil prices and demand for the year.
In addition to data from industry bodies, crude oil markets are also awaiting economic data and central bank meetings this week.
The monetary policy meeting is key for markets, after the lender unexpectedly struck at its December meeting, which rattled financial markets.
Inflation indicators are also in the center of attention, as well as the US, , and .
Markets will be watching for any signs of slowing economic growth amid fears of a recession in 2023. Oil prices fell in the first week of the year as the International Monetary Fund warned of a possible recession this year.
The idea has largely capped any upside in crude markets, and traders fear oil demand will be hit by slowing economic growth around the world.
While Chinese demand has shown some signs of recovery, the country is also grappling with its worst outbreak of COVID-19 yet, which markets fear could delay a larger economic recovery.