Oil futures tilted higher in Asian trade with US crude off January 26 lows, while Brent climbed from February 18 lows, as the dollar index scaled July 14 highs. 

It comes ahead of a spate of US data later today, and amid ongoing negotiations between the US and Iran  on the nuclear deal, which might open up Iranian exports to the world. 

As of 05:39 GMT, US crude futures due in September rose 0.43% to $90.94 a barrel, while Brent October futures rose 0.50% to $97.06 a barrel, as the dollar index rose 0.08% to 109.09.

From the US, the manufacturing PMI is expected down to 51.8 in August from 52.2, while the services PMI is expected up to 49.8 from 47.3. 

US new home sales are expected down to 574 thousand, compared to a 8.6% drop to 590 thousand in June. 

The People's Bank of China cut one-year lending rates by 5 basis points to 3.65% from 3.7%, and mortgage-bound five-year interest rates by 15 basis points to 4.3%.

Chinese prime minister Li Keqiang asked local governments that represent 40% of total Chinese GDP to take more measures to support the economy and the real estate sector.

Latest World Health Organization data showed Covid 19 infections at 590.66 million cases, with total deaths at 6.440 million.

Recent data showed Lithium, and other minerals producers in China were forced to close their operations for a few days due to the worst heat wave in six decades.

OPEC General Secretary Haitham Al Ghais expressed his optimism for the oil sector in 2023 and sees the world as dealing properly with inflation, while asserting the readiness for OPEC to cut or increase output according to market conditions.

He pointed to concerns about an economic slowdown in China that might impact oil demand, and other worries about weaker investments in the energy sector compared to overall demand growth.

He nonetheless believes such concerns, which nosedived oil prices by 16% this month, to be only transient, noting that oil producers worldwide have reached their upper limit capacity in output already.

Chinese oil refineries output fell to 12.53 million bpd in July, the lowest since March 2020, while oil imports in China rose to 8.79 million bpd recently as travel activities improved.

Otherwise, OPEC recently cut down estimates for global oil demand growth by 260 thousand bpd to 3.1 million bpd, yielding an expected total of 100 million bpd in 2022.

Baker Hughes data showed US oil rigs remained flat last week at 601 rigs, while rising in July for the 24th month in a row.

US output also stabilized last week at 12.1 million bpd, the highest since April 2020, but still down 1 million bpd, or 8% from a record high at 13.1 million bpd reached in March 2020.

US stock indices declined on Monday ahead of the Jackson Hall event. 

The annual Jackson Hall even includes many of the most important and famous central bank governors around the world to discuss developments of monetary policies and global trend. 

Markets also await a speech by Fed Chair Jerome Powell at the conference later. 

Dow Jones fell 1.4% to 33,235 as of 14:41 GMT, while S&P 500 fell 1.6% to 4,159, as NASDAQ shed 1.9% to 12,458.

Gold prices declined in European trade for the sixth straight session, marking four-week lows as dollar climbs against a basket of major rivals. 

The dollar on the other hand is on track for new historic highs amid strong haven demand and prospects of continuous policy tightening by the Fed. 

Prices Today

Gold prices fell over 0.8% to $1,731 an ounce, the lowest since July 27, after losing 0.6% on Friday, the fifth loss in a row under pressure from the dollar. 

Gold lost 3.1% last week, the first weekly loss in five weeks, and the largest in 6 weeks. 

The Dollar

The dollar index rose 0.35% today for the fourth straight session, marking 6-week highs at 108.48, and on track for new 2002 highs.

Dollar was boosted by a string of bullish remarks by several Fed officials, paving the way for a 0.75% rate hike once again in September. 

Saint Louis Federal Reserve President James Bullard said he supports a 0.75% rate hike for the third time in a row in September, with similar sentiment from San Francisco and Kansas City Fed Presidents.

Fed Bets

Markets now put a 47.5% chance on a 0.75% rate hike by the Federal Reserve in September, with a 52.5% chance of a 0.5% hike.

Estimates 

Analysts expect dollar to return back to 20-year highs soon enough , in turn hurting gold's standing and sending it possibly lower than $1,700.

The SPDR

Gold holdings at the SPDR Gold Trust rose 3.18 tones on Friday to a total of 989.01 tones. 

Euro tumbled in European trade for the third straight session against dollar, giving up parity for the first time in six weeks, and almost hitting 20-year lows as the fuel crisis sharpens in Europe. 

The dollar on the other hand is on track for new historic highs amid strong haven demand and prospects of continuous policy tightening by the Fed. 

EUR/USD fell 0.5% to 0.9988, the lowest since July 14, after losing 0.5% on Friday, the second loss in a row after bullish remarks by Fed officials. 

Euro lost 2.1% last week against dollar, the second weekly loss in three weeks, and the largest since early July. 

Fuel Crisis

Russia is planning to stop gas supplies through Nord Stream 1 for three days , raising pressure on Europe. 

German and European economies face serious challenges with spiking costs of living, while demand on Chinese exports remains slow. 

Chinese Rates 

The People's Bank of China cut one-year lending rates by 5 basis points to 3.65% from 3.7%, and mortgage-bound five-year interest rates by 15 basis points to 4.3%.

The move was meant to accelerate economic recovery and support the real estate sector. 

The Dollar

The dollar index rose 0.35% today for the fourth straight session, marking 6-week highs at 108.48, and on track for new 2002 highs.

Dollar was boosted by a string of bullish remarks by several Fed officials, paving the way for a 0.75% rate hike once again in September.