Oil prices steady as investors await inflation data, OPEC+ meeting
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Oil prices were steady in early Asian trading on Tuesday as investors awaited inflation data to assess future U.S. monetary policy and the production policy decisions from the OPEC+ meeting on June 2.
The Brent crude July contract dropped 3 cents to $83.07 a barrel by 0038 GMT. The more-active August contract slipped 4 cents to $82.85.
U.S. West Texas Intermediate (WTI) crude futures for July were at $78.68, up 96 cents, or 1.2%, from Friday's close, having traded through a U.S. holiday to mark Memorial Day without a settlement.
Oil prices rose over 1% on Monday in muted trade owing to public holidays in Britain and the United States after a downbeat week characterised by the outlook for U.S. interest rates in the face of sticky inflation.
"Investors are focusing on U.S. inflation data to determine the timing of rate cuts," said Satoru Yoshida, a commodity analyst with Rakuten Securities, adding that the market is also closely watching the upcoming meeting by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+.
"We expect oil prices to move higher in the coming days due to anticipated continued voluntary output cuts by oil producers and growing prospects for easing of U.S. monetary policy," he said, adding that the beginning of the U.S. driving season will also provide support.
The U.S. personal consumption expenditures index expected this week will be in the spotlight for further signals about interest rate policy. The index, due to be released on May 31, is viewed as the U.S. Federal Reserve's preferred measure of inflation.
German inflation data on Wednesday and euro zone readings on Friday will also be watched for signs of a European rate cut that traders have pencilled in for next week.
All eyes are also be on the upcoming online meeting of the OPEC+ on June 2.
The producers will discuss whether to extend voluntary output cuts of 2.2 million barrels per day into the second half of the year, with three sources from OPEC+ countries saying an extension was likely.
Meanwhile, Goldman Sachs raised its global oil demand forecast for 2030 on Monday and expects consumption to peak by 2034 on a potential slowdown in electric vehicle (EV) adoption, keeping refineries running at higher-than-average rates till the end of this decade.
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