Calm trend in oil

Oil is holding steady as investors await the OPEC report and inflation data. Oil extended gains as investors look for signs of whether supply cuts will be extended and U.S. inflation data that will shape expectations for monetary policy, ahead of OPEC’s market outlook. Brent traded above $83 a barrel after rising 0.7% on Monday, while U.S. crude approached $79. The cartel’s monthly deep dive comes about two weeks before members meet to decide policy, with refining cuts and timeframes narrowing, suggesting a slightly softer market. Meanwhile, U.S. producer price data is due late Tuesday and consumer data the next day will provide clues about whether the Fed has room to cut interest rates later in the year or whether cut expectations will be pushed back to 2025. Crude has been on a downtrend since April as the geopolitical risk premium triggered by tensions in the Middle East has largely evaporated. Still, prices have been holding high since the beginning of the year as OPEC and its allies have restricted flows, and the group is widely expected to extend restrictions into the second half. “We think OPEC+ will probably keep their current production plans unchanged and thus solidify the voluntary supply cuts,” said Vivek Dhar, an analyst at Commonwealth Bank of Australia. Against that backdrop, and with advanced economies expected to cut interest rates, Brent is expected to average $80 a barrel in the third quarter and $85 in the final three months, Dhar said.