Global oil prices rise slightly

WEB DESK: Global oil prices saw marginal gains on Monday in subdued trading sessions, influenced by public holidays in Britain and the United States.

This comes after a challenging week marked by concerns over U.S. interest rates amid persistent inflation pressures.

As of 1233 GMT, the Brent crude July contract increased by 56 cents to $82.68 a barrel, while the more actively traded August contract rose by 59 cents to $82.43. Similarly, U.S. West Texas Intermediate (WTI) crude futures climbed 58 cents, reaching $78.30.

Last week, Brent crude fell approximately 2 per cent and WTI nearly 3 per cent following the release of Federal Reserve minutes. The minutes revealed that some officials were open to raising interest rates further if necessary to combat ongoing inflation.

“Sentiment in the oil market has been volatile as investors continually adjust their expectations regarding the Federal Reserve’s monetary policy direction,” noted Vandana Hari, founder of oil market analysis firm Vanda Insights.

Recent economic data from Western economies have influenced expectations for interest rate adjustments, varying by region. Analysts from Bank of America indicated that while the European Central Bank might consider a rate cut in June, U.S. rates are expected to remain higher for longer.

This week, the focus will be on the U.S. personal consumption expenditures (PCE) index, which is anticipated to provide further insights into the Federal Reserve’s interest rate policy. The index, a preferred measure of inflation by the Fed, is set to be released on May 31.

Additionally, German inflation data on Wednesday and eurozone readings on Friday will be closely monitored for indications of a potential European rate cut.

Attention is also directed towards the upcoming meeting of the OPEC+ group, which includes the Organisation of the Petroleum Exporting Countries (OPEC) and allies like Russia. The virtual meeting is scheduled for June 2.

According to OPEC+ sources, an extension of the current output cuts of 2.2 million barrels per day is anticipated.

These developments are expected to shape the market sentiment and influence oil prices in the coming weeks.

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