Oil Prices Surge After Big Weekly Declines; Fed Signals Are Sought

Oil prices increased on Monday, recouping a portion of recent losses, despite continued pressure from concerns over increasing interest rates and declining demand ahead of additional Federal Reserve monetary policy guidance.

Fears of further policy tightening increased as a result of higher-than-anticipated U.S. inflation and hawkish remarks from some Federal Reserve officials. Crude oil prices were suffering severe losses from the previous week.

This year, rising interest rates are anticipated to stifle economic activity, which might lead to a decline in oil demand.

Around 21:44 ET, Brent oil futures increased 0.3% to $83.41 per barrel, whereas West Texas Intermediate crude futures increased 0.5% to $76.90 per barrel (02:44 GMT). Last week, both contracts declined by almost 4 percent.

This week's main focus is on the Fed's February meeting minutes, due on Wednesday. Throughout the meeting, the central bank maintained its hawkish language, and the minutes are likely to reflect this.

This week, a number of Fed speakers and a reading on the personal consumption expenditures index - the Fed's favored inflation indicator - are likely to give additional light on monetary policy.

Increasing indications of a U.S. supply surplus depressed oil prices, as the nation recorded significantly larger-than-anticipated inventory increases the previous week. Meanwhile, the federal government announced the sale of 26 million barrels of crude oil from the Strategic Petroleum Reserve.

From the beginning of the year, crude oil prices have struggled amid mounting concerns about a global economic slowdown as the impact of significant interest rate hikes begin to be seen.

Yet, oil bulls continue to anticipate a rebound in China as the country emerges from three years of COVID restrictions. According to the OPEC and IEA, an economic recovery in the world's largest oil importer is expected to drive petroleum consumption to historic highs this year.

The People's Bank of China kept its key mortgage interest rates at historical lows on Monday, as the government strives to bolster economic development with additional stimulus measures.

But, China's economic statistics has thus far depicted an average image of growth.