Oil prices fell on Monday after strong gains last week, as data released in China reinforced signs that its economy is slowing, though progress in China-U.S. trade talks has supported prices.
Brent crude was down 34 cents, or 0.4%, at $61.79 a barrel by 0531 GMT, having gained more than 4% last week, its best weekly gain since Sept. 20. West Texas Intermediate (WTI) crude futures were down 27 cents, 0.5%, at $56.39 a barrel, after rising more than 5% last week, also the biggest weekly increase since Sept. 20. Profits at Chinese industrial companies fell for the second straight month in September as producer prices continued their slide, highlighting the impact of a slowing economy and protracted U.S. trade war on corporate balance sheets.
“There have been some small profit-taking sells on the weak China data released on Sunday and unwinding of weekend hedges,” said Stephen Innes, Asia Pacific market strategist at Axi Trader. “But the market remains well supported on the dip,” he said, pointing to signs of progress in China-U.S. trade talks. The two sides issued a statement on Friday saying they are close to finalizing some parts of a trade agreement. U.S. energy companies also reduced the number of oil rigs operating this week, leading to a record 11-month decline as producers follow through on plans to cut spending on new drilling. Russia’s energy ministry said on Friday it is continuing close cooperation with Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers to enhance market stability and predictability.