Crude oil futures remained steady to higher during mid-morning trade in Asia Monday as market participants awaited fresh pricing cues. At 10:20 am Singapore time (0220 GMT), ICE April Brent crude futures were up 18 cents/b (0.29%) from Friday’s settle at $62.93/b, while the NYMEX March light sweet crude contract was 15 cents/b (0.27%) higher at $55.41/b. The US oil rig count fell by 15 to 847 in the week ended February 1, erasing the 10-rig increase the week before and posting the lowest total since May last year, Baker Hughes said in a weekly report Friday.
“Some profit-taking can be seen this morning [Monday] though it remains largely supported compared to last week’s levels,” IG market strategist Pan Jingyi said. A daily candlestick chart seen by S&P Global Platts showed the ICE April Brent futures contract touching an intraday low of $62.42/b and the NYMEX March light sweet contract an intraday low of $54.98/b early Monday before regaining ground as of 0220 GMT.
“The bigger picture lies with demand as the US-China issue overhangs. I wouldn’t be too concerned unless prices slide past the current consolidation zone [$59.50-$63/b for Brent],” she added. In addition to US-China trade talks, market participants will also be keeping a close eye this week on developments on the Venezuela sanctions and OPEC/non-OPEC production cut fronts. “Crude oil prices surged higher [Friday] as recent supply-side issues were joined with easing concerns of weaker economic growth,” ANZ bank analysts said in a note Monday.
“This follows on from reports of further cuts to OPEC+ output. Last week, Russian Energy Minister Alexander Novak said the country had gradually reduced output in January in line with its pledge to OPEC and will try to increase the reductions in February. And while the US and China have yet to reach a deal, markets were buoyed by reports that they have made significant progress,” ANZ added. As of 0220 GMT, the US Dollar Index was 0.03% higher at 95.320.