By Ambar Warrick
Investing.com – Oil prices fell on Monday after a sharp rally last week, as traders turned cautious and held on to some gains ahead of OPEC and IEA demand forecasts and a flood of economic data coming this week.
Crude oil prices rose over 8% last week on the prospect of a rebound in Chinese demand after the country reopened its borders and essentially confirmed a move away from its strict zero-COVID policy. US dollar weakness, amid signs of slowing inflation in the country, also helped oil prices.
The focus is now squarely on a monthly report from (OPEC) due Tuesday. Markets are waiting to see if the cartel will change its forecast for global demand amid a recovery in the Chinese economy.
Plunging 0.5% to $85.09 a barrel, while falling 0.6% to $79.67 a barrel in early Asian trade. Market volume is expected to be limited due to a US holiday on Monday.
Traders are also awaiting a report on Crude Oil Markets from the (IEA) due on Wednesday for the panel’s outlook on oil prices and demand for the year.
In addition to data from industry bodies, crude oil markets are also awaiting a slew of economic data and central bank meetings this week.
The monetary policy meeting is crucial for markets after the lender unexpectedly struck an aggressive chord during its December meeting – a move that rocked financial markets.
Inflation values from and are just as much a focus as data for the USA , , and .
With fears of a 2023 recession mounting, markets will be watching for signs of slowing economic growth. Oil prices plummeted in the first week of the year as the International Monetary Fund warned of a possible recession this year.
This notion has largely limited any upside potential in crude oil markets as traders fear that 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-ever COVID-19 outbreak, which markets fear could delay a larger economic recovery.