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Weak Chinese industrial data pushes oil down
OIL prices fell on Monday after strong gains last week, as data released in China reinforced signs that its economy is slowing, though progress in China-US trade talks has supported prices.
Brent crude was down 34 US cents, or 0.4 per cent, at US$61.79 a barrel by 0531 GMT, having gained more than 4 per cent last week, its best weekly gain since Sept 20.
West Texas Intermediate (WTI) crude futures were down 27 US cents, 0.5 per cent, at US$56.39 a barrel, after rising more than 5 per cent last week, also the biggest weekly increase since Sept 20.
Profits at Chinese industrial companies fell for the second straight month in September as producer prices continued their slide, highlighting the impact of a slowing economy and protracted US trade war on corporate balance sheets.
"There have been some small profit-taking sells on the weak China data released on Sunday and unwinding of weekend hedges," said Stephen Innes, Asia Pacific market strategist at Axi Trader.
"But the market remains well supported on the dip," he said, pointing to signs of progress in China-US trade talks. The two sides issued a statement on Friday saying they are close to finalising some parts of a trade agreement.
US energy companies also reduced the number of oil rigs operating this week, leading to a record 11-month decline as producers follow through on plans to cut spending on new drilling.
Russia's energy ministry said on Friday it is continuing close cooperation with Saudi Arabia and the Organization of the Petroleum Exporting Countries (Opec) and non-Opec oil producers to enhance market stability and predictability.
The statement came a day after Igor Sechin, chief cxecutive of Russian oil producer, Rosneft, said the September attacks on Saudi oil assets created doubts over its reliability as a supplier. The attacks temporarily shut down around half of the kingdom's oil output.
Opec+, an alliance of Opec members and other major producers including Russia, has since January implemented a deal to cut output by 1.2 million bpd to support the market.
The pact runs to March 2020 and the producers meet to review policy on Dec 5-6.
Elsewhere, a suggestion by US President Donald Trump that Exxon Mobil or another US oil company could operate Syrian oil fields drew rebukes from legal and energy experts.
Money managers cut their net long US crude futures and options positions in the week to Oct 22, the US Commodity Futures Trading Commission said on Friday. REUTERS