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Brent crude futures edged up 2 cents to $75.86 a barrel by 0913
GMT. U.S. West Texas Intermediate crude futures were up a single
cent at $71.22.
Both contracts jumped more than 2% on Friday but were down for a
seventh straight week, their longest streak of weekly declines
since 2018, on lingering oversupply concerns.
The recent price weakness drew demand from the United States,
which has sought up to 3 million barrels of crude for the
Strategic Petroleum Reserve (SPR) in March 2024.
"We know the Biden Administration is in the market looking to
refill the SPR, which will provide support," IG analyst Tony
Sycamore said in a note, adding that prices were also being
supported by technical chart indicators.
Despite the Organization of the Petroleum Exporting Countries
(OPEC) and allies, together known as OPEC+, having pledged to
cut 2.2 million barrels per day (bpd) of production in the first
quarter, investors remain sceptical about compliance. Output
growth in non-OPEC countries is expected to lead to excess
supply next year.
RBC Capital Markets expects stock draws of 700,000 bpd in the
first half, but only 140,000 bpd for the full year.
"Prices will remain volatile and directionless until the market
sees clear data points pertaining to the voluntary output cuts,"
RBC analysts said in a note.
With cuts not implemented until next month, oil faces a volatile
two months before clarity from any quantifiable compliance data,
the analysts said.
The latest consumer price index data from China, the world's
biggest oil importer, showed rising deflationary pressures as
weak domestic demand cast doubt over the country's economic
recovery.
Chinese officials on Friday pledged to spur domestic demand and
consolidate and enhance the economic recovery in 2024.
This week investors are watching for guidance on interest rate
policies from meetings at five central banks, including the U.S.
Federal Reserve, as well as U.S. inflation data for their impact
on the global economy and oil demand.
In the longer term for crude, U.N. Secretary-General Antonio
Guterres on Monday said that one key to success of the COP28
climate summit was for nations to reach agreement on the need to
phase out fossil fuels, albeit with countries possibly moving at
different rates.
(Reporting by Paul Carsten in London and Mohi Narayan and
Florence TanEditing by David Goodman)
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