New York, US (BBN) – Crude oil gave up slight early gains on Monday in Asia with China shut for a public holiday and investors shrugging off news at the weekend on upbeat output cuts by Russia and a pledge by Iraq to step-up compliance.
The US West Texas Intermediate crude May contract fell 0.14 per cent to $50.53 a barrel.
On the ICE Futures Exchange in London, Brent oil for June delivery eased 0.24 per cent to $53.40 a barrel.
At the weekend, Russia reported March oil output at 11.05 million barrels per day (bpd), down 200,000 bpd from an October baseline used to measure compliance with an oil output cut pact, while Iraq has assured OPEC anew it will fully comply with its commitments under the deal.
In Australia the AIG manufacturing index for March eased to 57.5 from 59.3, still solidly in expansion, while Japan’s Tankan large manufacturers survey showed a rise to plus-12 from plus-10.
Also in Australia, first quarter and building approvals spiked 8.3 per cent, well above the 0.5 per cent decline seen for February and retail sales dipped 0.1 per cent, missing the 0.3 per cent increase expected.
Also on Monday, financial markets in Shanghai are closed for a holiday and later in the US New York Fed President William Dudley, Philadelphia Fed President Patrick Harker and Richmond Fed President Jeffrey Lacker are all set to speak.
In the week ahead, investors will be looking to Wednesday’s Fed minutes for fresh indications on the timing of the next U.S. rate hike ahead of Friday’s closely watched nonfarm payrolls report and a meeting between Chinese President Xi Jinping and US President Donald Trump in Florida.
Last week, oil futures settled higher for the fourth session in a row on Friday, extending a rally to the strongest level in more than three weeks amid optimism that OPEC will extend its production-cut deal beyond June.
Sentiment in the oil market improved this week in wake of increasingly supportive rhetoric from a number of OPEC nations willing to extend production cuts into the second half of 2017.
OPEC agreed in November last year to curb its output by about 1.2 million bpd between January and June. Russia and 10 other non-OPEC producers have agreed to jointly cut by an additional 600,000 bpd.
In total, they agreed to reduce output by 1.8 million bpd to 32.5 million for the first six months of the year, but so far the move has had little impact on inventory levels.
A joint committee of ministers from OPEC and non-OPEC oil producers will meet in late April to present its recommendation on the fate of the pact.
A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.
Oil has been under pressure in recent weeks amid concern that an ongoing rebound in US shale production and swelling stockpiles in the US could derail efforts by other major producers to rebalance global oil supply and demand.
Oilfield services provider Baker Hughes said late Friday that the number of active US rigs drilling for oil rose by 10 last week, the 11th weekly increase in a row.
That brought the total count to 662, the most since September 2015.