NYMEX crude gains in Asia ahead of U.S. holiday, Yellen comments eyed

Investing.com - Crude oil prices ticked higher in early Asia on Monday as investors eyed supply/demand outlooks for the U.S., while remaining wary of global economic turmoil.

On the New York Mercantile Exchange, WTI crude for July delivery rose 0.08% to $59.94 a barrel.

Markets in the United States are closed for Memorial Day.

At the weekend, Reuters reported that Greece cannot make debt repayments to the International Monetary Fund (IMF) next month unless it achieves a deal with creditors, quoting the interior minister in what it said are the most explicit remarks yet from Athens about the likelihood of default if talks fail.

"The four installments for the IMF in June are 1.6 billion euros. This money will not be given and is not there to be given," Interior Minister Nikos Voutsis told Greek Mega TV's weekend show.

Last week, crude futures fell sharply on Friday paring some of its gains from one session earlier, amid a strengthening dollar aided by slight increases in inflation last month.

On the Intercontinental Exchange (ICE), Brent crude for July delivery fell 1.21 or 1.82% to $65.33 a barrel.

Oil services firm Baker Hughes (NYSE:NYSE:BHI) said in its weekly U.S. rig count report that oil rigs nationwide fell by one last week to 659, the lowest weekly level since August 2010. While the nationwide rig count has declined for 24 consecutive weeks, the pace of slowdown has dropped considerably since earlier in the year. Last fall, the rig count peaked above 1,600. A falling rig count has eased concerns of oversupply in the U.S. market.

On Wednesday, the Energy Information Administration (EIA) said crude stockpiles nationwide decreased for the third consecutive week amid slower output and increased refinery demand. Last week, U.S. crude output dropped to 9.262 million barrels per day from 9.374 million a week earlier, as production slowed in Alaska. Crude futures were relatively unchanged following the release of the report.

On Friday, a mostly upbeat Federal Reserve Chair Janet Yellen said Friday "it will be appropriate" for the Fed to start raising the federal funds rate from near zero "at some point this year" if the economy performs as she expects.

Yellen said she would want to see "continued improvement in labor market conditions" and become "reasonably confident" inflation will move back to 2% "over the medium term" -- the same two conditions the Fed's rate-setting Federal Open Market Committee has listed in its last two policy statements.

Downplaying apparent first quarter economic weakness, Yellen strongly suggested those conditions will be met if her fairly optimistic economic forecast is fulfilled.

"I expect inflation to move up toward our objective of 2% as the economy strengthens further and as transitory
influences wane."

But Yellen reiterated that rate hikes are apt to be "gradual" because of various headwinds that are still restraining the economy." She also echoed the FOMC statement in saying, "it will be several years before thefederal funds rate would be back to its normal, longer-run level."

A relatively benign CPI report for the month of April likely added to uncertainty. On its face, consumer prices appeared to be soft last month as the headline CPI only gained 0.1% from March, slightly below economists' forecasts. Over the last 12 months, the CPI-U all items index is down by 0.2%.