Oil prices eased on Monday as traders took profit ahead of fresh European and U.S. economic data, in spite of hopes for some resolution to the U.S.-China trade row that has hurt global economic growth and crimped energy demand.
Prices jumped about teo dollars a barrel on Friday after the world’s top two economies said they had made progress on trade talks while U.S. officials said the deal could be signed this month.
Brent crude futures for January LCOc1 fell 31 cents to 61.38 dollars a barrel by 0406 GMT, while December U.S. crude futures CLc1 was at 55.91 dollars a barrel, down 29 cents.
“Friday’s mega-rally was built on a combination of not-as-bad-as-feared data and optimism on a trade deal that really, only keeps the lights on. It does not increase the brightness of the world economy,” Jeffrey Halley, a Singapore-based senior market analyst for Asia Pacific at OANDA, wrote in a note.
“With plenty of oil going around for everyone from everywhere, oil, in particular, will be more susceptible to headline bombs this week.”
The European Union and the United States are set to announce manufacturing data on Monday with more U.S. and Chinese data to come later in the week.
“I think the trade talk continues to improve sentiment but … Asian oil traders want more convincing data from the macros side” before supporting oil, Stephen Innes, Asia Pacific market strategist at AxiTrader, said.
Still, a fall in the U.S. rig count for a second week in a row and an upbeat U.S. jobs report supported oil prices on Nov. 1.
Independent producers cut spending after record production weighed on the outlook for energy prices.
Also underpinning U.S. crude prices was a shutdown of the Keystone pipeline that sends Canadian heavy crude to the United States.
Owner TC Energy Corp said on Friday work was underway to plug the pipeline in North Dakota.
Production cuts by the Organisation of the Petroleum Exporting Countries (OPEC), Russia and other producers – a group known as OPEC+ – since January to reduce oil output by 1.2 million barrels per day are also propping up prices.
Still, Russia again missed its output cut target in October, energy ministry data showed on Saturday.
OPEC’s output recovered in October from an eight-year low after a rapid rebound in Saudi Arabia’s production from attacks on its oil infrastructure in September offset losses in Ecuador and voluntary cuts under the pact.
Protests at Iraq’s main Gulf port Umm Qasr on Saturday blocked the country’s food imports but did not affect the second-largest OPEC producer’s oil exports, which take place mostly from nearby offshore platforms.
Saudi Aramco finally kick-started its initial public offering (IPO) on Sunday, but offered scant details on the number of shares to be sold, pricing or the date for a launch. (Reuters/NAN)