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Crude last week jumped more than 6% after OPEC+, the
Organization of the Petroleum Exporting Countries (OPEC) and
allies including Russia, surprised the market with a new round
of production cuts starting in May.
Brent crude rose 18 cents, or 0.2%, to $85.30 a barrel by 1009
GMT on Monday, while U.S. West Texas Intermediate crude gained
11 cents to $80.81.
"Those who were bearish are questioning the demand outlook in
light of the cuts, whilst clearly those who were bullish are now
seeing even a tighter market over the second half," ING's head
of commodities research Warren Patterson said.
"I am in the latter camp and still see prices moving higher from
here as we go through the year."
Adding to tightness in supply has been a shutdown of Iraq's
northern exports. A deal was signed last week to restart the
flows, but as of Thursday they hadn't resumed.
Oil also drew support from a steeper-than-expected drop in U.S.
crude inventories last week, as well as a decline in gasoline
and distillate stocks, hinting at rising demand.
In global financial markets, a U.S. inflation report to be
released on Wednesday could help investors gauge the near-term
trajectory for interest rates.
"This week's U.S. data could be a drag on sentiment if strong
numbers reinforce expectations of the Fed continuing on its
tightening path, while weak numbers point to economic pain,
which means either way, risk-aversion grows," said Vandana Hari,
founder of oil market analysis provider Vanda Insights.
Also coming up are monthly reports from OPEC on Thursday and the
International Energy Agency on Friday, which will update oil
demand and supply forecasts.
(Reporting by Alex Lawler; Additional reporting by Florence Tan
in Singapore and Mohi Narayan in New Delhi; Editing by
Christopher Cushing, Kirsten Donovan)
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