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 The world's biggest energy consumer, China, faces significant
downward pressure on its economy, its premier Li Keqiang was quoted
by state radio as saying on Monday.
China is expected this week to report growth slowing to 7.2 percent
from a year ago, the weakest since the depths of the last global
economic crisis. Data from China's National Bureau of Statistics
showed on Sunday house prices fell for a fourth straight month.
Brent crude traded around $49.81 a barrel by 1218 GMT, down 36
cents. U.S. crude was trading down 51 cents at $48.18 a barrel.
Oil prices have dropped by more than half since last June as output
around the world soared while demand growth slowed. Although the
International Energy Agency (IEA) said last week a reversal in the
trend was possible this year, it added that prices may fall further
before rising.
"There's still more supply than demand and that's a situation that
will not change in just a few weeks," said Hans van Cleef, energy
economist at ABN Amro.
Iraqi Oil Minister Adel Abdel Mehdi said on Sunday Iraq pumped 4
million barrels per day (bpd) of oil in December, its highest ever
thanks to higher output from its southern terminals and a surge in
supply from the north.
Analysts said prices found some support from a drop in U.S. drilling
rigs, signifying a likely fall in production in the future. But they
said there was not much room for gains.
"Some positive data points helped to stabilize oil for now ...
Upbeat IEA comments and a falling U.S. rig count were the latest
positive news. While the news was able to halt oil's price decline,
it (is) not enough to turn prices bullish," Morgan Stanley said in a
note to clients on Monday.
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A meeting of the European Central Bank on Thursday will likely see
the launch of a government bond-buying campaign, pointing to further
euro falls against the dollar as well as to downward pressure on oil
prices.
"It is not hard to find evidence of increasing concerns around
global economic weakness. Yield curves across the world have been
flattening (longer term yields falling relative to short ones), a
dynamic typically associated with expectations of weakening economic
conditions," Timera Energy said on Monday.
(Additional reporting by Henning Gloystein in Singapore; Editing by
Christopher Johnson and David Evans)
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