WionDrive News Desk 
Oil prices were steady in early Asian trading on Tuesday as investors awaited key inflation data to gauge future U.S. interest rate moves and the production policy decisions from the OPEC+ meeting scheduled for June 2.
The Brent crude July contract dipped slightly by 3 cents to $83.07 a barrel by 0038 GMT, while the more actively traded August contract edged down 4 cents to $82.85.
U.S. West Texas Intermediate (WTI) crude futures for July delivery rose 96 cents, or 1.2%, to $78.68, having traded through the Memorial Day holiday in the U.S. without a settlement.
Oil prices climbed over 1% on Monday in subdued trading due to public holidays in Britain and the United States, following a bearish week marked by concerns over U.S. interest rate outlook amid persistent inflation.
“Despite the indisputably brighter mood seen in the last two days, interest rate concerns will most plausibly act as a (brake) on further attempts to send oil prices meaningfully higher in the immediate future,” said Tamas Varga of broker PVM.
“It is a fair assumption that no changes in production levels will be forthcoming,” he added regarding the OPEC+ meeting.
Concerns about persistently elevated U.S. interest rates contributed to crude oil’s weekly decline last week. Higher interest rates increase borrowing costs, potentially dampening economic activity and oil demand.
However, despite the perception that high interest rates could lead to softer oil demand growth, UBS analyst Giovanni Staunovo noted in a client note that “real-time mobility data indicates oil demand growth is still broadly healthy.”
On the air travel front, data from flight analytics firm OAG showed that U.S. seat numbers on domestic flights for May increased by 5% month-on-month and nearly 6% year-on-year, slightly exceeding 2019 levels.
The upcoming online meeting of OPEC+ producers on Sunday is anticipated, with traders and analysts expecting the 2.2 million barrels per day of voluntary production cuts to remain in place, further supporting oil prices.
Yoshida expects oil prices to rise in the coming days, driven by the anticipated continuation of voluntary output cuts by producers, growing prospects for easing U.S. monetary policy, and the start of the U.S. driving season, which should provide additional support.
“We expect oil prices to move higher in the coming days,” said Satoru Yoshida, a commodity analyst with Rakuten Securities, who cited anticipated continued voluntary output cuts by producers.
The beginning of the U.S. driving season will also provide a supportive factor for oil prices, according to Yoshida’s remarks.
The upcoming release of the U.S. personal consumption expenditures index on May 31, which is the Federal Reserve’s preferred inflation gauge, will be closely monitored for further signals regarding interest rate policy. Additionally, this week’s German and euro zone inflation data will be scrutinized for indications of a potential European rate cut.
All attention is focused on the OPEC+ online meeting on June 2, where the producers will discuss whether to extend the voluntary output cuts of 2.2 million barrels per day into the second half of the year. Sources suggest an extension of these cuts is likely.
Meanwhile, Goldman Sachs raised its global oil demand forecast for 2030 and expects consumption to peak by 2034, citing a potential slowdown in electric vehicle adoption, which could keep refineries running at higher-than-average rates until the end of this decade.
