LONDON: Oil prices stabilised on Monday after losses last week as lower-than-expected U.S. inflation data offset investors’ concerns about a supply surplus next year.

Brent crude futures were down by 17 cents, or 0.23%, to $72.77 a barrel by 1129 GMT. U.S. West Texas Intermediate crude futures were down 14 cents, or 0.2%, to $69.32 per barrel.

Oil prices rose in early trading after data on Friday that showed cooling U.S. inflation helped alleviate investors’ concerns after the Federal Reserve interest rate cut last week, IG markets analyst Tony Sycamore said.

“I think the U.S. Senate passing legislation to end the brief shutdown over the weekend has helped,” he added.

Oil prices steady as markets weigh Fed rate cut expectations, Chinese demand

But gains were reversed by a stronger U.S. dollar, UBS analyst Giovanni Staunovo told Reuters.

“With the U.S. dollar changing from weaker to stronger, oil prices have given up earlier gains,” he said.

The dollar was hovering around two-year highs on Monday morning, after hitting that milestone on Friday.

Brent futures fell by around 2.1% last week, while WTI futures lost 2.6%, on concerns about global economic growth and oil demand after the U.S. central bank signalled caution over further easing of monetary policy. Research from Asia’s top refiner Sinopec pointing to China’s oil consumption peaking in 2027 also weighed on prices.

Macquarie analysts projected a growing supply surplus for next year, which will hold Brent prices to an average of $70.50 a barrel, down from this year’s average of $79.64, they said in a December report.

Concerns about European supply eased on reports the Druzhba pipeline, which sends Russian and Kazakh oil to Hungary, Slovakia, the Czech Republic and Germany, has restarted after halting on Thursday due to technical problems at a Russian pumping station.

U.S. President-elect Donald Trump on Friday urged the European Union to increase U.S. oil and gas imports or face tariffs on the bloc’s exports.