HG MARKETS:

On Tuesday, oil prices fell as investors awaited key U.S. inflation data and the Fed’s policy meeting’s outcome to get a better idea of where inflation is going and how it will affect fuel demand. On Monday, expectations that the Northern Hemisphere summer vacation season will boost fuel demand this summer, which some analysts said was likely to be short-lived given the possibility of higher interest rates, had pushed prices up about 3% to a one-week high. Wednesday will see the end of the Fed’s two-day policy meeting and the release of May’s consumer price index data.

Businesses and consumers may expect to pay less in the future as prices fall, which can slow economic activity and reduce oil demand and cause purchases to dry up. In the meantime, prices were further impacted by falling Saudi crude exports to China for the third consecutive month. In a report, Goldman Sachs analysts noted that strong summer transport demand will push the oil market into a deficit of 1.3 million barrels per day (bpd) in the third quarter. They predicted that Brent would rise to $86 a barrel in that period. The U.S. dollar ( DXY), opens new tab, in the mean time, rose to a four-week high against a container of different monetary standards as the euro fell strongly because of political vulnerability in Europe after gains by a long shot right gatherings in deciding in favor of the European Parliament provoked a swollen French President Emmanuel Macron to call a snap public political decision.

After Friday’s stronger-than-expected employment data, prices now reflect a less-than-50 percent chance of the Fed cutting rates in September. Last week, expectations for a reduction had reached as high as 69%. Additionally, the market is awaiting U.S. monthly oil supply and demand data. On Tuesday, the Energy Information Administration (EIA), OPEC, and the International Energy Agency (IEA) will meet.