Investing.com– Oil prices rose Monday, rebounding from the previous week’s mild losses as traders digested mixed Chinese inflation data ahead of key U.S. inflation readings this week.
AT 08:15 ET (12:15 GMT), climbed 0.7% to $83.33 a barrel, while gained 0.8% to $78.85 a barrel.
Chinese inflation data offers mixed cues
Chinese inflation data for April, released over the weekend, showed a sustained recovery in inflation, offering hope that substantial monetary support from Beijing appeared to be supporting spending.
But Chinese inflation shrank for a 19th consecutive month, signaling that factory and business activity in the world’s biggest crude importer remained weak.
China’s oil imports in April had fallen from the prior month, albeit slightly. They were also largely flat from the same period last year, as the country grapples with a sluggish post-COVID economic recovery.
Alberta wildfire could cut output
Helping the tone Monday was the news of an evacuation alert for Fort McMurray, Alberta, as an out-of-control fire rages southwest of the major Canadian oil town, making it among the first actions ahead of the wildfire season.
In 2016, a huge wildfire in Fort McMurray forced the evacuation of 90,000 residents and shut in more than a million barrels per day of oil output.
Global supply will remain an issue ahead of June’s meeting of the Organization of Petroleum Exporting Countries, and allies, a group of major producers known as OPEC+.
Goldman Sachs said last week, in a note, that it no longer expects OPEC+ to partially reverse recent voluntary production cuts next month, expecting Saudi Arabia’s crude oil supply to remain steady at 9 million barrels per day in July, compared to their earlier estimate of 9.2 million barrels per day.
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However, there were reports over the weekend that Iraq’s oil minister said that the country would not agree to further supply cuts, and it is not clear whether this refers to a rollover of existing cuts or deeper cuts.
US CPI inflation data on tap
Crude prices were nursing mild losses from the prior week after weak readings on U.S. consumer confidence and high inflation projections spurred concerns over an economic cooldown in the world’s biggest fuel consumer.
The readings were also preceded by data showing a build in U.S. gasoline and distillate inventories.
That said, oil markets were also on edge ahead of key U.S. inflation readings this week.
data for April is due on Tuesday, while the more closely-watched reading is due on Wednesday.
The focus will be largely on any signs of cooling U.S. inflation, which could in turn give the Federal Reserve more impetus to cut interest rates.
The prospect of U.S. rates remaining at elevated levels for a lengthy period has been a major weight on oil prices in recent months, given that high rates are expected to subdue economic activity and chip away at oil demand.
(Ambar Warrick contributed to this article.)