Word “oil” and stock graph are seen through magnifier displayed in this illustration taken Sept 4, 2022. REUTERS/Dado Ruvic/Illustration/File photo
TOKYO – Oil prices eased on Monday, reversing their rally on Friday, as renewed concerns over waning demand in the United States and China dented market sentiment.
Brent crude futures for January were down 35 cents, or 0.4 percent, at $81.08 a barrel at 0051 GMT, while the U.S. West Texas Intermediate (WTI) crude futures for December were at $76.82, down 35 cents, or 0.5 percent.
Both benchmarks gained nearly 2 percent last Friday as Iraq voiced support for oil cuts by OPEC+, but lost about 4 percent for the week, notching their third weekly losses for the first time since May.
“Investors are more focused on slow demand in the United States and China while worries over the potential supply disruptions from the Israel-Hamas conflict have somewhat receded,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
The U.S. Energy Information Administration (EIA) said last week that crude oil production in the United States this year will rise by slightly less than previously expected while demand will fall.
Weak economic data last week from China, the world’s biggest crude oil importer, also increased fears of faltering demand. Additionally, refiners in China asked for less supply from Saudi Arabia, the world’s largest exporter, for December.
READ: Oil falls 1% as mixed China trade data offset supply cuts
Still, Kikukawa said oil prices would be supported if WTI approaches $75 a barrel.
“If the market falls further, we will likely see support buying on expectations that Saudi Arabia and Russia would decide to continue their voluntary supply cuts after December,” Kikukawa said.
Top oil exporters Saudi Arabia and Russia confirmed last week that they would continue with their additional voluntary oil output cuts until the end of the year as concerns over demand and economic growth continue to drag on crude markets.
READ: Oil nudges higher after Saudi Arabia, Russia stick to output cuts
OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, will meet on Nov. 26.
On the supply side, U.S. energy firms cut the number of oil rigs operating for a second week in a row to their lowest since January 2022, energy services firm Baker Hughes said. The rig count points to future output.