Oil prices surged ahead of OPEC report, Lagarde’s speech in focus

Investors start another busy week focusing on the OPEC monthly report, inflation figures from the US and UK, industrial production in China and global central banks’ speeches.

OPEC is set to revise 2022 demand lower

On Monday, oil prices rose for a second straight session ahead of the OPEC monthly report. Concern over US output following Hurricane Ida and expectations for higher demand helped push crude prices above Friday’s high in the morning session. Buyers are likely on the lookout for a two-week high of around 70.40, which could serve as a firm resistance level.

A revision of OPEC’s 2022 demand projection is expected on Monday, while China said earlier today it would release its details of planned crude oil sales from its strategic reserves soon.

Meanwhile, the CFTC’s Friday report showed that money managers increased their net long positions in US crude futures and options in the week to September 7.

Central banks tapering decisions in focus

As investors seek to gain an edge in understanding the path of tapering for global central banks, they are now likely to focus more on economic data this week.

Investors expect Lagarde to provide more insight into the ECB’s decision to reduce emergency bond purchases over the coming quarter when she speaks at 16:30 EEST on Monday.

Although the August U.S. jobs report was disappointing, the Fed will likely follow the ECB’s example of cutting its bond purchase program later this year.

After Bank of England governor Andrew Bailey said the economic recovery in the UK is slowing down, the BoE will be closely watching this week’s inflation, employment, and retail sales data, especially ahead of its September policy meeting.

US consumer price data and job data is due on Tuesday

Since yields drifted higher last week and risk aversion prevailed, the dollar recouped some losses and now sits at 92.70, just off its recent low of 91.94.

In the run-up to the Federal Reserve’s Sept. 21-22 meeting, traders will be monitoring Tuesday’s consumer price data and US retail sales and production data.

The core consumer price index is forecast to decline slightly to 4.2%.

The second-largest economy’s data comes on Wednesday

Data on China’s industrial production, retail sales, and fixed asset investment will be released on Wednesday, showing the economic impact of the latest Covid outbreak.

In August, China closed the world’s third busiest container port and imposed new restrictions in some areas.