Investing.com-- Oil prices fell slightly in Asian trade on Monday as mixed Chinese inflation data raised some doubts over the world’s biggest crude importer, while sentiment was also fragile ahead of key U.S. inflation readings this week.
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.
Brent oil futures expiring in July fell 0.3% to $83.53 a barrel, while West Texas Intermediate crude futures fell 0.3% to $77.59 a barrel by 20:58 ET (00:58 GMT).
Traders were seen largely pricing out a risk premium from persistent geopolitical unrest in the Middle East, given that the Israel-Hamas conflict had so far caused minimal disruptions in crude supplies.
But recent losses in crude were also limited by speculation over sustained production cuts by the Organization of Petroleum Exporting Countries and allies, beyond an end-June deadline.
Chinese inflation data offers mixed cues
Chinese inflation data for April, released over the weekend, showed a sustained recovery in consumer price index inflation, as constant monetary support from Beijing appeared to be supporting spending.
But Chinese producer price index 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.
US CPI inflation data on tap
Oil markets were also on edge ahead of key U.S. inflation readings this week.
PPI data for April is due on Tuesday, while the more closely watched CPI reading is due on Wednesday.
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 high for longer U.S. rates 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.