Oil prices were steady on Monday as support from OPEC-led supply restraint was countered by an uptick in U.S. drilling and concerns about demand due to the slow progress in U.S.-Chinese trade talks.
Benchmark Brent oil was little changed, up 3 cents at $62.13 a barrel at 0945 GMT. U.S. West Texas Intermediate (WTI) crude slipped 27 cent to $52.45.
“Oil prices are still trying to figure out what lead to follow. On the one hand, there is the OPEC+ cut story, now coupled with increasing issues around Venezuelan supply”, Vienna-based consultancy JBC Energy said.
“At the same time, it has to be argued that a lot of the economic data that has been released over the last few days has really not been too encouraging, and U.S.-Chinese trade talks are also seemingly not progressing very fast.”
Energy firms in the United States last week increased the number of oil rigs operating for the second time in three weeks, a weekly report by Baker Hughes said on Friday.
Companies added seven oil rigs in the week to Feb. 8, bringing the total to 854, pointing to a further rise in U.S. crude production, which already stands at a record 11.9 million bpd.
WTI prices were also weighed down by the closure of a 120,000-barrels-per-day (bpd) crude distillation unit (CDU) at Phillips 66’s Wood River, Illinois, refinery following a fire on Sunday.
The Organization of the Petroleum Exporting Countries and its allies, including Russia, a group known as OPEC+, have reined in output to prevent a supply glut.
The deal, effective from January, aims to cut 1.2 million bpd until the end of June, in a move producers and many analysts expect to help balance supply and demand in 2019.
OPEC and its allies meet on April 17 and 18 in Vienna to review the agreement.
U.S. sanctions on Venezuela, along with older sanctions on fellow OPEC member Iran, have also prevented crude prices from falling further.
But economic concerns still weigh on crude prices.
Trade talks between Washington and Beijing resume this week with a delegation of U.S. officials travelling to China for the next round of negotiations. The United States has threatened to increase tariffs already imposed on goods from China on March 1 if the trade talks do not produce an agreement.
