Yuka Obayashi
TOKYO (Reuters) – Oil prices fell on Monday, reversing Friday’s gains, as fresh concerns about weaker demand in the United States and China soured market sentiment.
At 0051 GMT, January Brent crude oil futures were down 35 cents, or 0.4%, at $81.08 a barrel, while December U.S. West Texas Intermediate (WTI) crude futures were down 35 cents, or 0.4%, at $81.08 a barrel. 5%) to $76.82.
Both benchmarks rose nearly 2% last Friday after Iraq expressed support for OPEC+ production cuts, but fell about 4% for the week, marking the third week of declines for the first time since May.
Hiroyuki Kikukawa, president of NS Trading, a subsidiary of Nissan Securities, said, “Investors are paying more attention to weak demand in the U.S. and China as concerns about potential supply disruptions due to the conflict between Israel and Hamas subside somewhat.” .
The U.S. Energy Information Administration (EIA) said last week that U.S. crude oil production will increase slightly less this year than previously expected, while demand will decline.
Weak economic data released last week by China, the world’s largest oil importer, also heightened concerns about weak demand. Additionally, Chinese refineries have asked Saudi Arabia, the world’s largest exporter, to reduce supplies in December.
Still, Kikukawa said oil prices would be supported if WTI approaches $75 a barrel.
“If the market falls further, we will see buying support from expectations that Saudi Arabia and Russia will decide to continue their voluntary supply cuts beyond December,” Kikukawa said.
Top oil exporters Saudi Arabia and Russia last week confirmed further voluntary production cuts that would continue until the end of the year, as concerns about demand and economic growth weighed on oil markets.
OPEC+, the Organization of the Petroleum Exporting Countries, and its allies, including Russia, will meet on November 26.
On the supply side, U.S. energy companies cut the number of oil rigs running for the second week in a row to the lowest level since January 2022, according to energy services firm Baker Hughes. Rig number indicates future output.
(Reporting by Yuka Obayashi; Editing by Shri Navaratnam)
