Investing.com -- Oil prices kept to a tight range on Monday but were reeling from three straight weeks of losses as concerns over worsening demand and economic growth weighed, with focus now turning to key U.S. and Chinese economic readings this week.
Concerns over a U.S. recession and banking crisis, rising interest rates, and soft Chinese demand drove crude prices to 15-month lows over the past three weeks. But markets found some support on Friday as stronger-than-expected nonfarm payrolls data pointed to some resilience in the U.S. economy.
Crude prices were now trading back above the $70 a barrel level, although further gains remained doubtful amid uncertainty over how the Federal Reserve will react to Friday’s strong labor data.
Brent oil futures were flat at $75.36 a barrel, while West Texas Intermediate crude futures rose 0.1% to $71.44 a barrel by 21:07 ET (01:07 GMT). Both contracts slumped 5% to 7% in the prior week.
Focus is now squarely on U.S. consumer price index inflation data, due on Wednesday, to gauge whether inflation eased further after a sharp increase in interest rates. While the data is expected to show a mild drop in inflation through April, it is still expected to read well above the Fed’s 2% annual target.
Trade data from China is due on Tuesday and is expected to provide more cues on commodity imports by the world’s largest oil importer. But overall Chinese imports are expected to weaken further in April, amid signs that a post-COVID economic recovery in the country is running out of steam.
Chinese inflation data is also due on Wednesday, and is expected to show continued weakness in price pressures as the country struggles to shore up spending and investment.
Softer-than-expected economic readings from China, particularly on the manufacturing sector, have seen oil markets question whether a recovery in the country will be sufficient in pushing oil demand to record highs this year.
This notion, coupled with signs of worsening U.S. economic conditions, sparked steep losses in crude prices over the past three weeks, largely negating an initial boost from an unexpected production cut by the Organization of Petroleum Exporting Countries (OPEC).
Still, with an OPEC cut now set to take effect from May, oil supplies are set to tighten, which could support prices in the near-term.