SINGAPORE- Oil prices dipped in Asian trade on Monday as investors tread cautiously ahead of fresh economic data from top consumers the United States and China this week, though expected crude supply cuts from Saudi Arabia and Russia limited losses.
Brent crude futures fell 51 cents, or 0.7 percent, to $77.96 a barrel and US West Texas Intermediate crude was at $73.34 a barrel, down 52 cents, or 0.7 percent.
“Oil traders may be cautious ahead of the US CPI and China’s slew of economic data later this week,” CMC Markets analyst Tina Teng said.
However, crude prices could rebound after OPEC+ announced plans to further reduce supply, she said.
China’s factory-gate prices fell at the fastest pace in over seven years in June, government data showed on Monday, as the momentum of economic recovery the world’s second-largest economy has slowed.
The oil benchmarks gained more than 4 percent last week to touch their highest marks since May, rising for a second straight week after the world’s biggest oil exporters Saudi Arabia and Russia pledged to deepen supply cuts in August.
“The presence of economic slowdowns in China adds to the prevailing uncertainty in the oil market,” said Mukesh Sahdev, head of downstream and oil trading at Rystad Energy.
“The market’s instability is further fueled by the ongoing tug-of-war between fears of demand control by Western economies and the supply-control strategies employed by OPEC, which impacts the oil market’s delicate balance.”
Saudi Arabia will extend its 1 million barrels per day (bpd) output cut into August and Russia will cut crude exports by 500,000 bpd. Instead of cutting output, Russia will be using the crude to produce more fuel to meet domestic demand, a government source told Reuters on Friday. – Reuters
