Oil steadied after a weekly drop, with the market still digesting OPEC+’s decision to restore supply, as traders look ahead to a set of industry reports, and a Federal Reserve decision on interest rates.

Brent traded near $80 after a barrel, after losing 2.5 per cent last week, as algorithmic trading amplified declines following the alliance’s announcement it would start returning more supply from the third quarter. West Texas Intermediate was close to $76.

Traders will be watching for monthly reports from OPEC, and the International Energy Agency, due on Tuesday, and Wednesday, that will shed light on the sector’s health. The Fed also releases its decision on interest rates mid-week. Strong economic data, and stubbornly high inflation, has seen the market pare bets the US central bank is getting close to its much-anticipated pivot to lower borrowing costs.

Crude has been falling since early April on a weakening demand outlook, with money managers reducing net long positions on Brent by the most ever in data going back to 2011, taking positioning to the least bullish in a decade. Net longs for US benchmark WTI also retreated.

Still, there are pockets of strength in some refined products markets, including jet fuel, where a recovery in air travel to pre-Covid levels is spurring a resurgence.

Geopolitics remained in focus. Tensions simmered in the Middle East, after Israel freed four hostages in an operation in Gaza, part of an assault that killed more than 200 Palestinians, according to the Hamas-run government media office. In Europe, far-right parties, gained ground in European Parliament elections.

Trading volumes are likely to be thin during Asian hours, with a holiday in mainland China, and Hong Kong.

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