By Ambar Warrick 

Investing.com– Oil prices fell on Monday after a sharp rally last week, as traders turned cautious and locked in some profits ahead of demand forecasts from the OPEC and the IEA, as well as a barrage of economic data due this week. 

Crude prices rallied over 8% last week on the prospect of a rebound in Chinese demand, after the country reopened its borders and essentially confirmed a pivot away from its strict zero-COVID policy. Weakness in the U.S. dollar, amid signs of slowing inflation in the country, also benefited oil prices.

Focus is now squarely on a monthly report from the (OPEC), due on Tuesday. Markets are waiting to see whether the cartel will change its forecasts for global demand in the face of a Chinese economic recovery.

fell 0.5% to 85.09 a barrel, while fell 0.6% to $79.67 a barrel in early Asian trade. Market volumes are expected to be limited due to a U.S. holiday on Monday.

Traders are also awaiting a report on crude markets from the (IEA), due on Wednesday, for the body’s outlook on oil prices and demand for the year.

Beyond data from industry bodies, crude markets are also awaiting a slew of economic data and central bank meetings this week. 

The monetary policy meeting is of key import to markets, after the lender unexpectedly struck a hawkish chord during its December meeting- a move that rattled financial markets. 

Inflation readings from the and are also in focus, as is data on U.S. , and .

Markets will be watching for any signs of slowing economic growth, amid increased fears of a recession in 2023. Oil prices had slumped in the first week of the year are the International Monetary Fund warned of a potential recession this year. 

This notion has largely limited any upside in crude markets, with traders fearing that oil demand will be impacted by slowing economic growth across the globe. 

While Chinese demand has shown some signs of recovery, the country is also grappling with its worst-yet COVID-19 outbreak, which markets fear could delay a bigger economic bounceback.