Investing.com– Oil prices rose slightly in Asian trade on Monday as data released last week showed some resilience in the U.S. economy, although traders were largely on edge before a string of central bank meetings this week, most notably the Federal Reserve.
Crude prices were nursing seven straight weeks of losses after disappointing production cuts by the Organization of Petroleum Exporting Countries and allies, while weak economic prints from top importer China also raised concerns over demand.
But this was somewhat offset by strong U.S. nonfarm payrolls data on Friday, which presented the labor market as among the few bright spots in the world’s largest fuel consumer.
While the reading diminished expectations for early interest rate cuts by the Fed, it also spurred some optimism over the outlook for crude demand- especially in the scenario of a soft landing for the U.S. economy.
This notion was supported by the Department of Energy saying it wanted to buy up to 3 million barrels of oil to further refill the Strategic Petroleum Reserve, which was drawn to a nearly 40-year low over the past year.
Crude prices found some support from the positive cues, with Brent oil futures expiring February up 0.5% at $76.19 a barrel, while West Texas Intermediate crude futures rose 0.4% to $71.39 a barrel by 20:01 ET (01:01 GMT).
Both contracts had risen from a near seven-month low on Friday.
Central banks, key US data on tap this week
Still, any major recovery in oil was limited before a string of key central bank meetings and economic readings this week.
The Fed is widely expected to keep rates on hold, but its outlook on planned rate cuts in 2024 will be closely watched following recent signs of labor market strength.
After the Fed meeting, U.S. inflation data for November is also on tap this week.
Beyond the Fed, interest rate decisions from the Bank of England, the European Central Bank and the Swiss National Bank are also due this week.
Global monetary conditions are likely to remain tight well into 2024, limiting economic growth and weighing on crude demand. This notion weighed heavily on oil through 2023, limiting any major upside from several OPEC+ production cuts.
Economic weakness in top oil exporter China has also been a major point of contention. Data last week showed that China’s oil imports sank to a four-month low in November, amid high stockpiles and muted fuel demand.