with market caution heightened by waning demand in the United States and China as well as mixed signals from the US Federal Reserve.
Brent crude futures for January were up 19 cents at $81.62 a barrel by 1250 GMT, having lost $1 in early trading, while US West Texas Intermediate (WTI) crude futures for December were up 14 cents at $77.31.
Despite some losses being recouped on November 10 as Iraq voiced support for oil production cuts by the OPEC+ group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, they still fell about 4% on the week to register the first three-week losing streak since May.
“Investors are more focused on slow demand in the United States and China while worries over potential supply disruptions from the Israel-Hamas conflict have receded somewhat,” said Hiroyuki Kikukawa, president of NS Trading, part of Nissan Securities.
The US Energy Information Administration (EIA) last week said that the country’s crude oil production this year will rise by slightly less than previously expected and that demand will fall.
Next year, per capita US gasoline consumption could fall to the lowest level in two decades, it said.
Markets were also wary of potential US policy tightening after Federal Reserve Chair Jerome Powell said last week that it could raise interest rates again if inflation isn’t curbed.
More hawkish Fed speak is “not a prospect that crude oil will welcome, given that recent data in China and the US has brought growth fears back to the surface”, said IG market analyst Tony Sycamore.
Weak economic data last week from China, the world’s biggest crude oil importer, also raised fears of faltering demand. Chinese refiners asked for less supply for December from Saudi Arabia, the world’s largest exporter.
China’s consumer prices fell to pandemic-era lows last month, sparking concern about the country’s economic recovery.
Still, if WTI approaches $75 a barrel, “we will likely see support buying on expectations that Saudi Arabia and Russia would decide to continue their voluntary supply cuts after December”, NS Trading’s Kikukawa said.
Last week top oil exporters Saudi Arabia and Russia, part of OPEC+, confirmed they would continue with additional voluntary oil output cuts until the end of the year as concerns over demand and economic growth continue to drag on crude markets.
OPEC on November 13 said oil that market fundamentals remained strong and blamed speculators for a drop in prices. The producer group slightly raised its 2023 forecast for global oil demand growth and stuck to its relatively high 2024 prediction.
