By Ambar Warrick
Investing.com — Oil prices tumbled on Monday after surging last week as traders turned cautious and locked in some profits ahead of OPEC and IEA demand forecasts, as well as oil prices. a deluge of economic data expected this week.
Crude prices soared more than 8% last week on the prospect of a rebound in Chinese demand, after the country reopened its borders and essentially confirmed a pivot away from its strict zero-COVID policy. The weakness in , amid signs of slowing inflation in the country, also benefited oil prices.
The focus is now on a monthly report from OPEC, due Tuesday. Markets are waiting to see if the cartel will change its forecast for global demand in the face of a Chinese economic recovery.
fell 0.5% to 85.09 a barrel, while it fell 0.6% to $79.67 a barrel in early Asian trading. Market volumes are expected to be limited due to a US holiday on Monday.
Traders are also awaiting a crude markets report from the IEA, due Wednesday, for the body’s outlook for oil prices and demand for the year.
Beyond data from industry bodies, crude markets are also awaiting a slew of economic data and central bank meetings this week.
The monetary policy meeting is of critical importance to markets, after the lender unexpectedly struck a hawkish deal at its December meeting – a move that rattled financial markets.
Inflation readings from and are also in focus, as are data from the US , , and .
Markets will be watching for any sign of slowing economic growth amid heightened fears of a recession in 2023. Oil prices had fallen in the first week of the year as the International Monetary Fund warned of a potential recession this year.
This notion has largely limited any upside in crude markets as traders fear oil demand will be hurt by slowing economic growth across the world.
While Chinese demand has shown signs of recovery, the country is also grappling with its worst outbreak of COVID-19, which markets believe could delay a bigger economic rebound.