China auto sales, US-China focus in focus

Oil prices weakened on Monday after climbing to their highest this year in the season, when China reported car sales in January, fell in a seventh month, and claimed fuel needs in the world's second largest oil utility.

International Brent Raw Futures was $ 66.20 per barrel at 0353 GMT, down 5 cents from their last close. Brent previously climbed to $ 66.78 per barrel, the highest since November 2018.

U.S. West Texas Intermediate (WTI) crude futures were $ 55.82 a barrel, up 23 cents from their last close. WTI prices also increased highest since November, at $ 56.13 a barrel earlier this Monday.

Traders said the Brent prices were missing after China reported the weak car sales data.

China's car sales last month fell by 1[ads1]5.8 percent compared to the same month in 2018, an industry association said on Monday. This continued the 2018 trend, where China recorded the first annual decline in vehicle sales on record.

So-called new energy consumption in January, which includes electric vehicles, recorded an increase of 140 per cent, and underlines the expectation that oil demand from Cars can peak in China in the coming years.

Despite these data, global oil markets remain relatively tight due to precipitation organized by the petroleum exporting countries (OPEC) and some non-affiliated producers such as Russia. The group of producer countries agreed late last year to cut production by 1.2 million barrels per day (bpd) to prevent a large supply overhang from swelling.

Additional supportive crude prices have been US sanctions against oil exporters and OPEC members Iran and Venezuela.

Traders said the financial markets, including raw futures, were also generally supported by hopes that the US and China would soon resolve their trade disputes, which have drawn global economic growth.

"Positive signs in trade negotiations in the US and China helped boost the mood across markets," ANZ Bank said Monday.

At least partial compensation of supply savings has been an increase in US crude oil production by more than 2 million bpd in 2018, to a record 11.9 million bpd.

And there are signs that US production will rise further.

US energy companies last week increased the number of oil rigs in search of new supplies by three to a total of 857, said energy service Baker Hughes in a weekly report on Friday.

This means that US rig numbers are higher than a year ago when fewer than 800 rigs were active.

– CNBC contributed to this report.

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