Oil down, eyes on global economic data

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    SINGAPORE- Oil prices eased on Monday as traders remained cautious ahead of fresh European and US economic data, despite hopes for some resolution to the US-China trade row that has hurt global economic growth and crimped energy demand.

    Prices jumped more than 3 percent on Friday after the world’s two largest economies said they had made progress on trade talks while US officials said the deal could be signed this month.

    Brent crude futures for January fell 27 cents to $61.42 a barrel while December US crude futures were at $55.94 a barrel, down 26 cents.

    Traders may be taking profits on oil ahead of uncertainty around macro-economic data and US oil inventory reports, Stephen Innes, Asia Pacific market strategist at AxiTrader said.

    “I think the trade talk continues to improve sentiment but … Asian oil traders want more convincing data from the macros side” before supporting oil, he said.

    The European Union and the United States are set to announce manufacturing data on Monday.

    Still, a fall in the US rig count for a second week in a row and a stellar US jobs report supported oil prices last week. Independent producers cut spending after record production weighed on the outlook for energy prices.

    Also underpinning US 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 Organization 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.

    But in its long-awaited announcement, Aramco, the world’s most profitable company, offered few specifics on the number of shares to be sold, pricing or the date for a launch.

    Bankers have told the Saudi government that investors will likely value the company at around $1.5 trillion, below the $2 trillion valuation touted by Crown Prince Mohammed bin Salman when he first floated the idea of an IPO nearly four years ago.

    Aramco also did not mention what measures it has taken to beef up security following unprecedented attacks on its oil plants in September.

    Sources have told Reuters the oil company could offer 1 percent-2 percent of its shares on the local bourse, raising as much as $20 billion to $40 billion. A deal over $25 billion would top the record-breaking one of Chinese e-commerce giant Alibaba in 2014.

    “Today is the right opportunity for new investors to reap the benefits of Aramco’s ability to achieve value, and boost it on the long-term,” Aramco Chairman Yasir al-Rumayyan told a news conference at the company’s headquarters in the eastern city of Dhahran. – Reuters