Oil prices rose on Monday after falling earlier due to short-term demand worries ahead of US inflation data.
Brent futures for April delivery increased 35 cents to $86.74 per barrel, or a 0.41% gain. Crude oil in the United States rose 64 cents, or 0.79%, to $80.35 a barrel.
The move occurred after investors first looked concerned about the inflation data, which is coming on Tuesday.
The Federal Reserve of the United States has been raising interest rates to combat inflation, sparking fears that the move could hamper economic activity and demand for oil.
“It is difficult to overstate the importance of this single data point as traders and the Fed look for confirmation of the gradual downward trend of the past few months,” said Matthew Ryan, head of market strategy at financial services firm Ebury.
Furthermore, supply fears were somewhat alleviated on Monday as a shipment of Azeri oil sailed from Turkey’s Ceyhan port, the first since a severe earthquake in the region on Feb. 6.
Ceyhan serves as a storage and loading hub for pipelines carrying oil from Azerbaijan and Iraq.
Oil prices rose to their highest level in two weeks on Friday after Russia, the world’s third-largest oil producer, announced a 500,000 barrel per day (bpd) cut in March, or roughly 5% of output, in retaliation for Western export limitations imposed in response to the Ukraine war.
Both the Brent and WTI contracts surged more than 8% last week, boosted by expectations about a demand rebound in China following the repeal of COVID limitations in December.