Investing.com - Oil prices fell in Asian trading on Monday, reversing most of the gains made in the previous session in anticipation of the Federal Reserve meeting and key economic indicators for the week This has prompted profit-taking activities.
Traders are still watching the Israel-Hamas war, after Israel over the weekend launched a ground attack on Gaza. But signs that the war is not escalating immediately, and that there are few actual disruptions to oil supplies in the Middle East, have kept concerns about conflict somewhat limited.
Fears that the Israel-Hamas war could disrupt regional oil supplies were a driving factor in oil prices earlier in October, although traders had difficulty assessing the real impact. of what the war will be like. This causes the crude oil market to fluctuate strongly, with Brent oil continuously rising close to 90 USD/barrel in recent sessions.
Brent oil futures fell 0.6% to $88.74 a barrel, while WTI crude futures fell 0.7% to $84.94 a barrel as of 9:12 p.m. ET (01:12 a.m. GMT). Both contracts lost about 3% last week.
Fed meeting, China PMI are the main focus this week
The oil market is largely awaiting the Federal Reserve's meeting this Wednesday, with any tightening signal from the central bank suggesting more headwinds to crude demand.
Concerns about persistently higher US interest rates have weighed on oil prices in recent months, partly offsetting a boost from tighter supply. While US fuel demand remains steady despite higher prices, traders are concerned that this could change in the coming months.
The Fed is expected to keep interest rates unchanged this week. However, officials still left open the possibility of raising interest rates one more time this year, especially after some inflation indicators were hotter than expected.
The dollar steadied on Monday, maintaining recent gains and also pressuring oil prices.
But ahead of the Fed meeting, markets are also awaiting key data on the purchasing managers index from China, which will shed more light on business activity in the major oil importer best of the world.
China's economy has shown some signs of stabilization in recent months after seeing a sharp decline in growth this year. The country's aviation regulator recently said it would increase the number of domestic flights by 34% compared to pre-pandemic levels - a positive sign for oil demand, although air travel still accounts for a small portion of China's total fuel consumption.
The Bank of Japan is also scheduled to meet on Tuesday, with traders weighing in on the bank's likelihood of policy changes as it struggles with rising inflation.
