Early Tuesday Asian trade saw oil prices dip as investors grew cautious ahead of this week’s crucial U.S. inflation data and as focus shifted to trade data from top crude importer China.
Brent oil futures dropped 0.43% to $76.68 a barrel, while West Texas Intermediate crude futures fell 0.40% to $72.87 a barrel by 10.47 A.M. Bangkok time.
On Monday, crude prices increased by over 2% after a Federal Reserve survey of U.S. lending conditions showed that the failure of many U.S. banks this year had not had any significant effect on loan activity as predicted.
Together, this and Friday’s stronger-than-expected nonfarm payrolls reports helped calm oil market nerves that had been jangling over fears of a deep U.S. recession this year.
Despite the uptick in prices, crude is still trading at a significant annual loss as investors wait for U.S. inflation data due on Wednesday for further guidance on the economy. The report is anticipated to contribute to the Fed’s stance on interest rates.
This week’s focus is also on OPEC’s monthly report, which is due on Thursday, for any changes in the outlook following the cartel’s unanticipated supply cut earlier this year. The cartel had already warned that weakening global economic conditions could slow demand this year.