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Oil falls on profit booking ahead of economic data

Oil falls on profit booking ahead of economic data

Mubasher: Oil prices retreated on Monday as traders locked in profit before new data from the European Union (EU) and the US, even with higher prospects of some resolution to the trade conflict between the US and China, according to Reuters.

By 7:26 am GMT, US Nymex crude futures declined 0.23% to $56.07 per barrel (pb), while global benchmark Brent futures fell by 0.24% to $61.54 pb.

Oil climbed by roughly $2 pb on Friday, after the world’s biggest two economies said that they made progress in their talks, as US officials said a deal could be inked this month.

However, “this does not increase the brightness of the world economy,” Singapore-based OANDA Asia Pacific senior market analyst was quoted by Reuters.

Manufacturing reports from the EU and US are due later on Monday, while they will be followed by more US and Chinese data later in the week.

“I think the trade talk continues to improve sentiment but ... Asian oil traders want more convincing data from the macros side” before supporting oil, AxiTrader Asia Pacific market strategist Stephen Innes was quoted by the news agency.

A drop in US rig count fell for the second week running, while a positive jobs report gave a push to the commodity’s price last week.

Furthermore, output restraints by the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers, an alliance known as OPEC+, agreed since January to scale back oil production by 1.2 million barrels per day (bpd).

However, Russia once again missed its cut target last October, as per shown by the Energy Ministry data on Saturday.

OPEC’s production rebounded in October from an eight-year trough, as Saudi Arabia managed to swiftly recover its production after September attacks.