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Brent crude futures fell 40 cents, or 0.5%, to $78.07 a barrel
by 1005 GMT, and U.S. West Texas Intermediate crude was also off
40 cents, or 0.5%, at $73.46 a barrel,
"Oil traders may be cautious ahead of the U.S. CPI and China's
slew of economic data later this week," CMC Markets analyst Tina
Teng said, of inflation data due out on Wednesday.
In the U.S., data on Friday pointed to the smallest job gains in
two-and-a-half years, but strong wage growth.
The figures will likely keep the U.S. Federal Reserve on track
to raise interest rates at its July meeting.
China's factory-gate prices fell at the fastest pace in more
than seven years in June, government data showed on Monday, as
recovery in the world's second-largest economy slowed.
However, crude prices could rebound after OPEC+ announced plans
to further reduce supply, Teng added.
Oil benchmarks gained more than 4% last week to touch their
highest marks since May, rising for a second straight week after
the world's biggest oil exporters Saudi Arabia and Russia
pledged to deepen supply cuts in August.
"The presence of economic slowdowns in China adds to the
prevailing uncertainty in the oil market," said Mukesh Sahdev,
head of downstream and oil trading at Rystad Energy.
"The market's instability is further fueled by the ongoing
tug-of-war between fears of demand control by Western economies
and the supply-control strategies employed by OPEC, which
impacts the oil market's delicate balance."
Saudi Arabia will extend its 1 million barrels per day (bpd)
output cut into August and Russia will cut crude exports by
500,000 bpd. Instead of cutting output, Russia will be using the
crude to produce more fuel to meet domestic demand, a government
source told Reuters on Friday.
Saudi Arabia's cuts are easing its oil glut as floating storage
off the Egyptian Red Sea port of Ain Sukhna is down by almost
half to 10.5 million barrels from mid-June, according to data
from oil analytics firm Vortexa as of July 7.
(Additional reporting by Florence Tan and Emily Chow; Editing by
Tom Hogue, Stephen Coates, Jamie Freed and Alexander Smith)
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