Investing.com - Oil prices held steady near the unchanged mark to start the week, as focus shifted from supply and demand to the outlook for monetary policy easing from the Federal Reserve.
New York-traded West Texas Intermediate crude futures dropped 9 cents, or 0.2%, to $57.42 a barrel by 8:32 AM ET (12:32 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., slipped 5 cents, or 0.1%, to $64.18
Barani Krishnan, senior commodity analyst at Investing.com, argued that “conflicting supply-demand signals have lately muddied the path for prices, particularly in oil,” and suggested that that leaves prices more exposed to extraneous variables such as Fed policy.
“A drop in interest rates would weaken the U.S. dollar and lift alternative assets such as commodities,” Krishnan said. “Conversely, a Fed stay would steady - or even strengthen -the greenback, weighing on oil and gold prices.”
Krishnan noted that the strong jobs report cast doubt over whether the Fed is ready to cut interest rates aggressively.
No fewer than 10 appearances from policymakers are scheduled for this week, the highlight being Fed Chairman Jerome Powell’s semiannual monetary policy report to Congress on Wednesday and Thursday.
Outside of the impact of policy moves on the dollar, tension in the Middle East continued to simmer in the background, supporting crude prices.
Iran admitted over the weekend that it had increased uranium enrichment beyond the purity threshold agreed in a nuclear deal that Washington pulled out of last year, according to Iranian news agency ISNA.
Speaking on Sunday, U.S. President Donald Trump warned that Tehran “better be careful” on the decision which he claims to be a step towards the development of nuclear weapons.
In other energy trading, gasoline futures fell 0.8% to $1.9145 a gallon by 8:34 AM ET (12:34 GMT), while heating oil declined 0.2% to $1.9007 a gallon.
Lastly, natural gas futures gained 0.2% to $2.423 per million British thermal unit.