NEW YORK: Crude oil prices slipped on Monday in subdued trading after a three-week rally capped by the long Easter holiday weekend, but losses were curbed by strong economic growth in China and a weaker dollar.
Overnight, strong March investment, retail sales and exports all suggested that China, the world's No. 2 oil consumer, might carry solid economic momentum into spring.
However, Robert Yawger, director of energy futures at Mizuho Americas said China's strong Gross Domestic Product was offset by fears of oversupply and profit taking.
"The market was overbought so these people are definitely booking profits at this point," he said.
Benchmark Brent crude futures were down 37 cents at $55.52 at 1:12 p.m. EDT (1712 GMT) while US West Texas Intermediate (WTI) crude futures were down 39 cents at $52.79 a barrel.
Volumes were thin, with over 127,000 Brent futures contracts and about 222,000 WTI contracts changing hands, more than 60 percent lower than Thursday's trading volumes.
With financial markets closed across Europe, the focus was on geopolitical tensions.
"The biggest issues right now are going to be geopolitical in nature," said Mark Watkins, regional investment strategist at the Private Client Group at US Bank in Park City, Utah.
"Right now all eyes are on the Korean peninsula and that may cause a little instability with the markets as a whole ... between now and the OPEC meeting, that will be the No. 1 thing to watch."
The Organization of the Petroleum Exporting Countries will meet on May 25 to consider extending output cuts beyond June to reduce a glut that has depressed prices. Iran fed hopes that OPEC and non-OPEC producers would extend the cuts, but Saudi Arabia's energy minister said it was too early to discuss an extension.
US Vice President Mike Pence on Monday warned North Korea that US strikes in Afghanistan and Syria, one of North Korea's few close allies, showed that the country should not test the resolve of President Donald Trump.
The dollar slipped to a five-month low against the safe-haven Japanese yen on tensions with North Korea.
Fighting in Libya has cut oil output, but state oil company National Oil Corporation has reopened at least one field.
US drillers last week added rigs for a 13th straight week. Investors are pouring money into the industry.
Comments
Comments are closed.