Oil Prices Rise Amid Inflation and Anticipated OPEC Signals

Oil prices experienced a slight increase during Asian trading on Monday, recovering somewhat from significant losses incurred last week. Traders are eagerly awaiting additional insights on U.S. inflation and a forthcoming meeting of the Organization of Petroleum Exporting Countries (OPEC).

However, trading activity is likely to be subdued due to market holidays in both the U.S. and the UK. As of 20:41 ET (00:41 GMT), oil futures expiring in July rose by 0.1% to $82.22 a barrel, while another contract increased by 0.2% to $77.85 a barrel.

### Oil Market Responds to Recent Losses and Inflation Data

Both oil contracts fell over 2% last week, reaching February lows as concerns grew about persistently high interest rates dampening demand. This week, the focus is on U.S. inflation data, specifically the Personal Consumption Expenditures (PCE) index, which is favored by the Federal Reserve.

Recent comments from Fed officials regarding persistent inflation have contributed to market volatility, with traders adjusting their expectations for potential interest rate cuts this year. There are widespread concerns that elevated rates could suppress economic activity, eventually affecting crude oil demand in the upcoming months.

An unexpected increase in U.S. crude inventories has also pressured prices, but demand from the world’s largest fuel consumer is anticipated to rise due to the busy summer travel season.

### OPEC+ Meeting Anticipated for Supply Guidance

The oil market is also looking ahead to a meeting of OPEC+ scheduled for June 2, where members are expected to discuss the extension of current production cuts beyond the end of June. Extended production cuts, coupled with a potential increase in demand, could lead to tighter oil markets in the near term, which would be favorable for prices. These production cuts have been primarily implemented by OPEC to support crude pricing over the past year.

OPEC has projected an increase in demand by 2.25 million barrels per day for the year, while the International Energy Agency forecasts a more modest growth of 1.2 million barrels per day.