Investing.com — Oil prices edged higher Monday as signs of an improving economy in China boosted demand hopes at a time when forest fires in China threaten supplies.
AT 2:30 PM ET (19:30 GMT), oil rose 0.5% to $83.21 per barrel, while US West Texas Intermediate crude futures rose 0.8% to settle at $78.92 per barrel. barrel.
Chinese inflation data fuels global growth hopes
Chinese inflation data for April, released this weekend, showed a continued recovery in inflation and boosted hopes that demand and economic growth would continue to recover following substantial monetary support from Beijing.
Chinese oil imports were down in April from the previous month, albeit slightly. They were also largely flat from the same period last year as the country struggles with a slow economic recovery from the COVID-19 crisis.
A wildfire in Alberta could reduce production
The tone was helped Monday by news of an evacuation warning for Fort McMurray, Alberta, as an out-of-control fire rages southwest of the major Canadian oil city, making it one of the first actions ahead of wildfire season.
In 2016, a massive forest fire in Fort McMurray forced the evacuation of 90,000 residents, halting oil production of more than a million barrels per day.
Global supply will remain an issue ahead of the June meeting of the Organization of the Petroleum Exporting Countries and allies, a group of major producers known as OPEC+.
Goldman Sachs said in a note last week 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 previous estimate of 9.2 million barrels per day.
However, this weekend there were reports that Iraq’s oil minister said the country would not agree to further supply cuts, and it is not clear whether this refers to a continuation of existing cuts or deeper cuts.
Dollar unchanged versus US CPI inflation data
Prices were also helped by dollar weakness as investors awaited key inflation data this week, with figures due on Tuesday and Wednesday respectively.
The figures are expected to come after a series of better-than-expected inflation reports in the first quarter, which forced investors not only to reject their rate cuts but also to reduce the number of expected rate cuts to just two for the year.
(Peter Nurse, Ambar Warrick contributed to this article.)
