SINGAPORE (Reuters) – Oil prices were mixed on Monday with traders setting cautious hopes of a backlash from last week's loss of progress in talks to end the US-China trade war, against a backdrop of global economic downturn weighing on future oil demand.
FILE PHOTO: An oil pump is seen just after sunset outside Saint-Fiacre, near Paris, France September 17, 2019. REUTERS / Christian Hartmann / File Photo
Brent crude futures LCOc1 edged down 1 cent to $ 58.36 per barrel within 0656 GMT, while US West Texas Intermediate (WTI) crude oil CLc1 stood at $ 52.85, an increase of 4 cents.
Both contracts were concluded last week with a decline of more than 5% following bleak US and China production data, as the prolonged series among the world's top economies harms global growth and increases the risk of recession.
U.S. and Chinese officials will meet in Washington on October 10-11 in the next, much-awaited, fresh effort to reach an agreement.
On the supply side, a faster-than-expected resumption of Saudi Arabia's output also followed a September 14 attack on key production facilities, which pushed down oil prices, although the Middle East remained tense.
"The macro winds outweigh the oil supply prospects now, despite tensions in the Middle East and a reduced reserve capacity cushion," said Stephen Innes, Asia Pacific market strategist at AxiCorp.
In Iraq, the second largest producer among the Petroleum Exporting Countries (OPEC), fatal unrest against the government represents the biggest security and political challenge so far for Prime Minister Adel Abdul Mahdi's year-old government.
Iraq's oil exports of 3.43 million barrels per day (bpd) from Basra terminals could be disrupted if instability lasts for several weeks, Ayham Kamel, Eurasia Group's Middle East and North Africa practice leader, said in a note.
"Any disruption to oil production would occur at a time when Saudi Arabia has lost a significant portion of its energy system layoffs (available capacity)," he said.
"While Saudi oil production is now close to 9.9 million bpd, it is not clear that the capacity is fully operational at 11.3 million bpd, and (the attack) the Abqaiq plant has lost a significant portion of its redundancy."
Global supply is also facing repair and maintenance pressure.
The Buzzard oil field in the British North Sea is closed for pipe repair work, a spokesman from China's CNOOC said Friday. Buzzard is the main contributor to Forties & # 39; crude stream, the largest of the five North Sea oil grades that support Brent crude oil futures.
Meanwhile, Libya's National Oil Corporation (NOC) on Sunday said it will close the Faregh oil field at Zueitina port for scheduled maintenance from Monday to October 14.
The current Brent price is about 23% down from the 2019 peak of $ 75.60 a barrel registered in April.
Still, it is too early for OPEC to discuss deeper cuts in oil production despite the decline in oil prices, quoted by Secretary General Mohammed Barkindo quoted by Russian news agency TASS on Monday.
Reporting by Florence Tan; Editing by Kenneth Maxwell