By Laura Sanicola
(Reuters) -Oil prices settled lower on Monday, after rising for three straight weeks, as concern about further interest rate hikes that could curb demand balanced the prospect of a tighter market due to supply cuts from OPEC+ producers.
The U.S. dollar rose after U.S. jobs data pointed to a tight labor market, heightening expectations of another Federal Reserve rate hike. Dollar strength makes oil more expensive for other currency holders and can weigh on demand.
Brent crude settled down 96 cents, or 0.2%, at $84.58 a barrel while U.S. West Texas Intermediate also fell 94, or 0.1%, to $79.74. Both benchmarks fell by more than $1 earlier in the session
“We look for this week’s trade to be heavily influenced by inflation data featured by Wednesday’s CPI and Thursday’s PPI that will likely revive the specter of higher interest rates that could strengthen the U.S. dollar,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
Crude last week jumped more than 6% after OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, surprised the market with a new round of production cuts starting in May.
Oil also drew support from a steeper-than-expected drop in U.S. crude inventories last week, as well as a decline in gasoline and distillate stocks, hinting at rising demand.
In global financial markets, a U.S. inflation report to be released on Wednesday could help investors gauge the near-term trajectory for interest rates.
Also coming up are monthly reports from OPEC on Thursday and the International Energy Agency on Friday, which will update oil demand and supply forecasts.
(Additional reporting by Alex Lawler; Additional reporting by Florence Tan in Singapore and Mohi Narayan in New Delhi; Editing by Christopher Cushing, Kirsten Donovan, Barbara Lewis and Sandra Maler)
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