Oil Prices Drop ahead of Economic Data Reports, but OPEC+ Cuts Keep Market Afloat

Oil prices fell in early Asian trade on Monday as investors cautiously awaited inflation data reports from major economies this week, but expected Saudi and Russian crude supply cuts backed the market.

Brent crude futures fell 35 cents, or 0.45%, to $78.12 a barrel by 10.00 A.M.Bangkok time, and U.S. West Texas Intermediate crude dropped 39 cents, or 0.53%, to $73.47 a barrel.

Even though the oil market traded cautiously at the beginning of the week, analysts anticipated a rebound in crude prices after OPEC+ announced agreements to further restrict supplies.

As the world’s two largest oil suppliers, Saudi Arabia and Russia, promised to deepen production curbs in August, both benchmarks rose more than 4% last week, touching their best points since May.

Strong wage growth and a modest drop in the unemployment rate reported on Friday in the United States are likely to keep the Federal Reserve on track to raise interest rates at their forthcoming meeting in July.

The U.S. Commodity Futures Trading Commission (CFTC) reported on Friday that money managers increased their net long U.S. crude futures and options holdings in the week ending July 3.